Bush, Kerry diverge over economy

Democratic presidential candidate Sen. John Kerry has been campaigning hard on the economy, charging President Bush is willing to send jobs overseas — “outsourcing” — and that he has presided over the worst job-creation record since the Great Depression.

This year’s election pits Mr. Kerry, formerly a fierce defender of free trade who has recently become a fiercer advocate for “fair trade,” against a president who has pursued free trade at every turn, including multilateral agreements in the Western Hemisphere and bilateral agreements with nations throughout the world.

It also pits two views of how the economy is performing right now.

On the campaign trail, Mr. Kerry highlights high unemployment rates in major states that are running well above the 5.4 percent national average: 6.7 percent in Michigan, 6.3 percent in Ohio, 7.4 percent in Oregon and 6.1 percent in Illinois.

Mr. Bush counters that his $1.7 trillion in tax cuts over the next 10 years have spurred an economy battered by the tech-stock collapse, the September 11 terrorist attacks, the corporate-accounting scandal and the Iraq war that has kept the financial markets in turmoil.

His administration points to a string of improving employment statistics, including 1.7 million new jobs since August 2003, and an economy growing at more than 3 percent, as interest rates remain relatively low and inflation is nowhere in sight.

With barely six weeks to go before the election, Mr. Bush will continue to push his optimistic outlook as Mr. Kerry tries to cultivate unrest among the electorate as the two candidates make a final push to sway voters.

The economy “is not as good as Bush says it is, but it’s not as bad as Kerry says it is,” said Democratic economist Charles L. Schultze, who was chairman of the President’s Council of Economic Advisers under President Carter.

“If push comes to shove, I’d say that job growth will probably pick up,” said Mr. Schultze, a senior fellow at the Brookings Institution.

The two candidates have sharply different agendas on economic policy.

Mr. Bush’s economic agenda for the next four years would make his tax cuts permanent, expand free-trade agreements throughout Central and South America, Asia and Africa, and overhaul the federal tax code to make it simpler, fairer and reduce compliance costs.

Mr. Bush touts his desire to let workers invest part of their Social Security payroll taxes in stocks and bonds to create investment wealth that they would own and control.

“It’s something government can’t take away, and it’s something you can pass on from one generation to the next,” the president said last week at a campaign rally at Shawnee State University in Portsmouth, Ohio.

He also wants to increase job-retraining assistance, as well as create grants to offer relief to economically distressed areas.

Mr. Kerry routinely berates the president’s tax-cut policies and says he would repeal parts of the across-the-board income-tax cuts, including tax-rate reductions for those who make more than $200,000 a year. He says he would use the additional revenue to cut the $422 billion budget deficit in half in four years.

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