Bush View of Economy at Odds With Forecast

news.yahoo.com

Bush View of Economy at Odds With Forecast

By TOM RAUM, Associated Press Writer

WASHINGTON - An economy with blue skies, happy workers and prosperity for all, just around the corner. That's the sunny picture painted Wednesday at President Bush's economic conference, where nary a discouraging word was uttered and Bush's second-term priorities were resoundingly praised. In reality, Bush will have a hard time getting any of his major proposals through a skeptical Congress.

Bush's plans to overhaul the tax code and Social Security and to limit lawsuit liability awards are generating stiff opposition, even among some groups that supported his earlier economic endeavors.

On the opening day of Bush's choreographed two-day economic conference, moderators and participants alike sang praises to his first-term accomplishments and second-term agenda. His proposals — many still being formulated — were hailed as the remedy for what still needs to be fixed.

Vice President Dick Cheney (news - web sites): "If we stay on that path, the years ahead will bring even greater progress and prosperity."

Larry Mocha, a Tulsa, Okla., manufacturer of truck air brake systems: "I want to thank the administration for all the positive things you've done for our economy. ... It hasn't always been this good."

Treasury Secretary John Snow: "We are the envy of the world."

Harvard economics professor Martin Feldstein: "I'm pleased to say the economy is now in very good shape."

"It's not exactly `Crossfire,'" joked American University political scientist Alan J. Lichtman.

Lichtman said the administration was clearly using the forum to pitch the president's program, not gather new ideas. "The jury is still out" on how effective the tactic will prove, he said.

The forum kicked off an intense White House public relations effort to win public support. It may take a lot of salesmanship.

Bush's proposal to let younger workers invest some of their Social Security withholdings in the stock market has drawn substantial opposition. Proponents say such a system promises higher long-term returns, allowing the government to spend less. But opponents say it could leave retirees holding the bag in times of prolonged market downturns.

"This is not a recipe for strengthening the system," said Henry J. Aaron, an economic analyst at the Brookings Institution, not among those invited to the forum.

The AARP, formerly known as the American Association of Retired Persons, opposes any diversion of money from the current system into personal accounts. Last week, it told its 35 million members Bush's proposal would "make the problem worse." The AARP supported Bush's legislation last year that created a Medicare prescription-drug benefit.

Bush's still-undefined tax restructuring has drawn fire from powerful interest groups. The National Retail Federation opposes any overhaul that moves in the direction of a national sales tax. Other organizations have pleaded for retaining particular tax breaks. The Tax Relief Coalition, which supported the president's earlier tax cuts, has been noncommittal.

Trial lawyer groups oppose limits on jury verdicts, while deficit hawks are wary of Bush's proposal to make his first-term tax cuts permanent.

None of those groups, nor their concerns, were represented at Bush's forum.

While the economy does appear to be recovering, things are not as bright as participants suggested. Job creation remains anemic, budget and trade deficits are at record highs, and a long-slumping dollar threatens to drive up interest rates.

The only time participants painted a dark picture was when they talked about financial burdens suffered because of large legal judgments or because of estate taxes, echoing Bush's invocation of a "death tax." Bush would permanently eliminate estate taxes and put limits on jury awards in medical malpractice and asbestos lawsuits.

"If we can achieve legal reform in America, it'll make it a better place for people to either start a business and-or find work," Bush said Wednesday, participating in a panel on limiting lawsuits.

"All we're asking for is fairness, Mr. President — just as you've said," said Home Depot Chairman Bob Nardelli, who hosted a $3 million fund-raiser for Bush at his Atlanta home during the campaign.