Friday, December 22, 2000

A top economic adviser to President Clinton yesterday accused President-elect George W. Bush of saying the economy is weaker than it is to build a case for his $1.3 trillion tax cut.

“I think it sends a signal that he’s willing to be political in describing the economy, instead of serious and disciplined and not political,” Gene Sperling told ABC News.

Mr. Sperling warned yesterday that the president-elect’s “talking down” the economy could create a self-fulfilling prophesy.

“With most private-sector forecasters still projecting a soft landing and solid growth for next year, the next president and his team should not be talking down our economy and potentially hurting confidence just to gain short-term political positioning,” he said in a separate interview with the Associated Press.

Mr. Bush responded in Texas that he is a pragmatist, not a doomsayer.

“I have said that there are some warning signs on the horizon. I think people are going to find out that when I’m sworn in as the president, I’ll be a realist,” Mr. Bush said.

“And if there are warning signs on the horizon, we need to pay attention to them, and we need to act in a positive way to make sure that our economy continues to grow so people will be able to find high-paying, high-quality jobs.”

The Commerce Department yesterday reported a third-quarter growth rate of 2.2 percent, well below the growth rate in recent months.

Vice President-elect Richard B. Cheney yesterday also denied that the incoming administration’s assessment of the economy is politically motivated, but he repeated there are signs the economy is slowing.

“We’ve tried to be very precise and accurate in our statements,” Mr. Cheney said as he paid a courtesy call to Sen. Joseph I. Lieberman, his defeated rival for vice president.

“We don’t want to talk down the economy, clearly,” but “there does seem to be a lot of evidence” that the economy is slowing, Mr. Cheney said.

Mr. Bush and his aides also dismiss “the notion that politicians can talk the market down any more than they can talk the market up,” Bush spokesman Ari Fleischer said in a conference call with reporters.

The Bush team repeatedly has warned of an economic downturn in recent weeks.

“We may well be on the front edge of a recession here,” Mr. Cheney said Dec. 3.

The simmering dispute lent an undercurrent of friction to Mr. Bush’s conciliatory meeting Tuesday with President Clinton in the Oval Office.

Mr. Bush ducked a reporter’s question about whether he will inherit a recession.

“I really don’t have any comment,” Mr. Bush said.

But Mr. Clinton pointedly said a recession is unlikely.

“Well, a recession is two quarters in a row of negative growth,” Mr. Clinton said. “I don’t think we’re going to have that.”

Mr. Clinton added that “49 of the 50 blue-chip forecasters think that growth will be 2.5 percent next year, and that’ll keep unemployment low.”

The next day, back in Texas, Mr. Bush said he saw “warning signs of a possible slowdown” and repeated his call for his across-the-board tax cut.

“I believe strongly that tax relief is part of the prescription for any economic ill that our nation may have,” Mr. Bush said.

Mr. Lieberman agreed that the economy was slowing some but maintained that such a downshift was inevitable and healthy rather than a cause for alarm.

“It looks like it’s slowing down a little bit,” the Connecticut senator said after his meeting with Mr. Cheney.

“But you’ve got to look at it in perspective, because the economy has been pumping away at an extraordinary rate. In some ways, we’re way above the norm.”

But Mr. Cheney was undeterred.

The economy “was growing at a fairly rapid rate, on the order of 5 percent or better, and it’s slowed,” Mr. Cheney said.

“Whether or not this ultimately results in a recession that is, negative real growth nobody knows at this time,” Mr. Cheney said.

Later in the day, White House spokesman Jake Siewert defended Mr. Clinton’s stewardship of the economy.

“We’ve had a pretty good track record on the economy not one that we’re in the least bit ashamed about or worried about. But it is important to be guarded and measured in what we say about the economy,” Mr. Siewert said.

Mr. Clinton and his aides take personally the rift over the economy. They see the nation’s economic expansion as Mr. Clinton’s foremost achievement.

Mr. Siewert said it is important in a “rough spot” to talk about how to improve the economy, rather than “worry and fret and opine about the dangers” in the future.

“We’re not trying to muzzle anyone,” Mr. Siewert said. “I think we’re just urging a measured tone.”

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