Jobs Comment Brings Out GOP Damage Control
Gannett News Service
February 15, 2004

WASHINGTON — There is no clearer sign that Republicans fear they are vulnerable on economic issues than their public attack on President Bush's top economic adviser for saying the loss of American jobs to workers overseas is "a plus for the economy."

But Republicans seem undecided over the best way to distance themselves from Gregory Mankiw, the head of Bush's Council of Economic Advisers, for remarks that are tantamount to political poison in an election year where who wins the White House could hinge on the issue of jobs.

Some want Mankiw fired. Some said he was flat wrong. Some said he was right but just described the problem in an "insensitive manner."
And while Republicans hunted for a unified message, Democrats saw a huge opening. Democrats have accused Bush all week not just of allowing jobs to flow abroad, but of encouraging it.

"This week, Americans learned something important. Exporting jobs isn't an accident — it's administration policy," Senate Minority Leader Tom Daschle of South Dakota said Thursday.

Sen. Debbie Stabenow, D-Mich., said Mankiw's comments over the practice of American companies "outsourcing" jobs to much lower paid employees overseas was just another example of the administration slighting U.S. workers.

"We not only have a policy of an administration not willing to fight for our jobs and create a level playing field ... but we see them refusing to extend unemployment insurance," Stabenow said. "We see them trying to take away overtime from people who are working."

Mankiw made the controversial remarks Monday while releasing Bush's annual assessment of the economy.

"Outsourcing is a growing phenomenon, but it's something that we should realize is probably a plus for the economy in the long run," Mankiw told reporters.

But the practice of American companies hiring workers in India, Uganda or elsewhere to handle computer complaint calls, process credit-card paperwork or even read X-rays troubles many Americans, especially as the U.S. economy is struggling its way out of a recession.

While the unemployment rate is falling, the economy is not producing jobs as quickly as it usually does in a recovery. The unemployment rate fell to 5.6 percent in January, but the pace of job creation is far slower than it has been in most economic recoveries. An estimated 2.2 million jobs have been lost in the three years of Bush's presidency — the most since the Depression.

And that is a particularly sore point in states where manufacturing jobs have disappeared for good, and the jobless rate is higher than the national average. Many of those states will be key battlegrounds in the November election: Michigan, Ohio, Illinois and Pennsylvania.

Bush stopped in Harrisburg, Pa., Thursday to tout his economic program and tried to address the jobs controversy indirectly during an appearance at a high school."There are people looking for work because jobs have gone overseas," Bush said. "And we need to act in this country."
Other Republicans were far more direct.

Rep. Don Manzullo, R-Ill., said Mankiw should resign because his comments "were insensitive and they were wrong."

On Wednesday, House Speaker Dennis Hastert, R-Ill., was critical of Mankiw's suggestion that outsourcing was "a new way of doing international trade ... and that's a good thing." Hastert did not call on Mankiw to quit.

"I understand that Mr. Mankiw is a brilliant economic theorist," Hastert said, "But his theory fails a basic test of real economics. An economy suffers when jobs disappear."

But Rep. Deborah Pryce of Ohio, the No. 4 GOP leader in the House and in charge of trying to shape an articulate message for her fellow Republicans, said Mankiw was essentially correct, but stated his case poorly.

"The fact of the matter is that outsourcing is an economic reality as our economy grows and as trade increases," Pryce told reporters Thursday. "It was just politically cold. ... It was very politically insensitive."

John Feehery, a spokesman for Hastert, said Pryce was right that the loss of jobs overseas is a fact of modern life, but he said she and Hastert both believe Bush and Republicans are working to create new jobs to replace the lost ones.

Democrats, Feehery said, support high-tax, anti-trade solutions that ultimately would choke the economy.