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Bush trumpets economy

| Saturday, Jan. 7, 2006

CHICAGO - President Bush on Friday opened a sharp election-year attack against Democrats, who he said would devastate the economy and turn back recent job gains by blocking free trade and raising taxes.

It was Bush's first 2006 speech on the road and, with Republican control of Congress potentially at stake in the November elections, the president pulled no punches.

"Just as this economy is getting going, there are some in Washington who want to take the money out of your pocket," the president said in a speech before a friendly audience at the Economic Club of Chicago. "They think they can spend it better than you can." He mentioned Democrats only once but it was clear they were the target of his remarks.

Bush has repeatedly called for Congress to make permanent all the tax cuts passed at his urging earlier in his administration. Most are due to expire before or at the end of 2010.

With GOP leaders having had little success making the cuts permanent, the House and Senate are debating bills to extend some through the end of the decade. Democrats particularly oppose extending the lower rates for capital gains and dividends.

The president equated that opposition with an intention to raise taxes by people he said "don't believe in tax cuts." He ridiculed one unnamed Democratic lawmaker -- later identified as House Minority Leader Nancy Pelosi, D-Calif. -- for saying during floor debate that the cuts were "a reckless, irresponsible tax plan that will undermine opportunity in our country."

"Since that congresswoman had uttered those words, the economy has added more than 4.5 million new jobs," Bush said, crediting the tax cuts for the gains.

Pelosi quickly replied from Washington. "Recent news about cuts in workers' pay and insecurity about their pensions is also increasing the economic concerns of the American people," she said. "And yet the Bush administration is cheerleading policies that help the wealthy while doing nothing to address these fundamental problems."

The president also took on Democrats over the issue of new free trade agreements, which he argues would spur job creation.

"Now, we've got some people in Washington that are what I call economic isolationists," Bush said. "They don't believe trade is good. They believe that it's OK to wall ourselves off from the rest of the world. I disagree strongly."

Most recently, Democrats overwhelmingly opposed the new Central American Free Trade Agreement, arguing that pacts negotiated by both the Clinton and Bush administrations have prompted the flight of American jobs overseas.

Bush came to Chicago, where he also appeared on a raucous, paper-littered trading floor at the Chicago Board of Trade, as part of an effort to dispel the public's lingering financial anxieties by trumpeting recent good news.

"The American economy heads into 2006 with a full head of steam," the president proclaimed.

On the day that the government released its December jobs report -- which showed weaker-than-expected job growth -- the president's economic team fanned out across the country. Vice President Dick Cheney spoke at a Harley-Davidson factory in Kansas City, Mo.; Treasury Secretary John Snow appeared at the New York Stock Exchange; Commerce Secretary Carlos Gutierrez was in Louisville, Ky.; Labor Secretary Elaine Chao was in Baltimore; and Energy Secretary Sam Bodman went to Pittsburgh.

The president and his team shrugged off December's slowdown to highlight a longer trend toward the positive. While October's payroll gain was revised downward slightly and December saw only about half the jobs created that economists had predicted, adding 108,000 jobs, November's hiring spurt turned out to be much bigger than previously thought, with 305,000 jobs created, up from 215,000.

"It's getting pretty hard for the critics to make the case that the tax cuts weren't good for the economy," said Cheney, speaking before machinists inside the hulking Harley warehouse.

Bush's approval ratings on the economy remain low at 39 percent -- close to his record-lowest rating in November of 37 percent.

Senate Minority Leader Harry Reid, D-Nev., said Bush's rosy scenario doesn't fit with most Americans' firsthand experiences.

"Job creation remains anemic, millions of Americans still struggle to find a job and wages continue to fall farther and farther behind," he said. "Democrats will not rest until we address stagnant wages and rising costs for health care, gas, college tuition and home heating that are putting a squeeze on middle-class families."

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