- The Washington Times - Tuesday, September 2, 2003

The White House yesterday seized on a new report showing growth in manufacturing as the latest sign the economic recovery is gaining momentum, despite Democratic claims to the contrary.

“You’re beginning to see our economy pick up more steam and grow even faster,” said White House Press Secretary Scott McClellan. “There are a lot of positive signs out there.”

The latest sign was yesterday’s report by the Institute for Supply Management (ISM), which said manufacturing activity expanded in August for the second consecutive month. The August expansion was more significant than expected, taking manufacturing to its highest level since December.

“Though two months of growth do not establish a trend, there is strength in the various segments of this report that we have not seen for some time,” said Norbert J. Ore, who oversees ISM’s manufacturing index. “The continuation of a second-half recovery appears on track.”

The news came on a day when President Bush discussed the economy over lunch at the White House with Federal Reserve Chairman Alan Greenspan. A day earlier, the president announced a series of measures designed to boost growth in manufacturing — the economic sector that has suffered the lion’s share of job losses.

Democrats were unimpressed by the expansion in manufacturing and a host of other recent signals that the economic recovery is accelerating.

For example, Sen. John Kerry of Massachusetts referred to the economy as another “Bush downturn.”

“George Bush’s only economic plan is lavish tax breaks for those at the top,” he said during a speech formally announcing his presidential candidacy. “Under the Bush administration, in less than three years, 3 million jobs have been lost. This is an astonishing failure and it is an outrage.”

The White House acknowledged employment has lagged other indicators of the recovery. Mindful of this political vulnerability, Mr. Bush has embarked on an aggressive jobs-creation campaign, which he will discuss in an economic speech tomorrow in Kansas City, Mo.

“The president’s focused on creating jobs,” Mr. McClellan said. “What’s most important is getting our economy going and creating jobs.”

Aside from jobs, the White House believes it is well on its way toward taking the economy off the table as a potential campaign issue for Democrats. Last week, the Commerce Department reported the economy grew at an annual rate of 3.1 percent in the second quarter, or more than double the first quarter’s growth rate.

Meanwhile, the Dow Jones Industrial Average yesterday gained 107 points to close above 9,500 for the first time in more than a year. The Dow has risen by some 2,000 points, or more than 25 percent, in less than six months.

In addition to attacking the president over employment, Democrats are increasingly blaming him for rising federal deficits, which have been fueled in part by recent tax cuts. Yesterday, the White House downplayed the significance of the deficit.

“I mean, we do have one,” said Mr. McClellan. “It is manageable, and that’s why we’re working to address it as well.”

The administration believes the deficits will be mitigated as the economy continues to expand, pumping cash into the Treasury. But Mr. Bush insists growth could be even more robust and is calling on Congress to enact a series of measures he says will further stimulate the economy.

These include tort reform, a comprehensive energy bill and restraints on federal spending. In the meantime, the president plans to appoint an assistant commerce secretary who will function as the administration’s “manufacturing czar.”

“This person’s focus will be specifically on the manufacturing sector,” Mr. McClellan explained. “Over a number of years now, manufacturing has seen a decline in jobs.”

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