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Bush claims credit for third-quarter boom

Democrats point to weak job market

President Bush speaking in Ohio Thursday:
President Bush speaking in Ohio Thursday: "The tax relief we passed is working."

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COLUMBUS, Ohio (CNN) -- President Bush Thursday cited the third-quarter growth of the nation's gross domestic product to 7.2 percent as proof his economic plan is working.

"That's the fastest growth we've had in nearly 20 years," Bush said in a speech before workers at Central Aluminum Co., in Columbus. "Exports are expanding, investment is rising, housing construction is growing. The tax relief we passed is working."

The GDP number was up from the second quarter's 3.3 percent, and exceeded the average prediction by economists of 6 percent. Administration officials joined Bush in crediting Bush's tax cuts for the upturn, but Democratic critics said the surge does not make up for what the described as a weak job market.

"I think every single American is far more interested in J-O-B than G-N-P," said Senate Minority Leader Tom Daschle, D-South Dakota.

The White House adopted a cautious tone in the face of such criticism. Press Secretary Scott McClellan said, "While the economy is moving in the right direction because of the action that we have taken, there is more work to be done. ... We need to continue to act to build upon the steps we have taken to get our economy growing so that we can continue to translate growth into job creation."

Still, other Bush administration officials moved quickly to make the case that the surprisingly strong economic growth was a direct result of the president's tax cuts and other economic initiatives.

In a statement issued moments after the Commerce Department released new growth numbers, Treasury Secretary John Snow said, "Today's report on real GDP (gross domestic product) in the third quarter shows that the president's economic policies are having a positive impact on the economy. The Jobs and Growth Act has put more money in the pockets of American families and helped businesses to make new investments."

Snow said, "We are seeing signs of economic recovery: the value of U.S. stock markets has increased $2 trillion since the beginning of this year, disposable personal income is up 3.8 percent at an annual rate in 2003, and the U.S. home ownership rate was 68.4 percent in the third quarter -- its highest level ever."

He called the GDP report "very encouraging news for our economy" but said, "We still have more work to do to ensure that every American who wants a job can find a job."

Senate Minority Leader Tom Daschle:
Senate Minority Leader Tom Daschle: "We'll take any good news we can get, but the bottom line is jobs."

Snow said he looks forward to working with the president and Congress " to implement additional economic initiatives that will keep the U.S. economy firmly on the road to recovery."

Commerce Secretary Don Evans also told reporters that the surges in the third quarter were due to Bush's tax cuts.

"We're growing the economy and soon we'll be growing more jobs," he said. "Today's strong performance shows the American economy is headed in the right direction thanks to President Bush's jobs and growth agenda.

"By creating the conditions for greater economic growth, President Bush is setting our country on the right track towards helping all Americans find work," Evans said. "While we are encouraged by these numbers, the president will not rest until there are enough jobs for every American worker."

Speaking at a news conference at which Democrats hammered the administration for a proposed change in overtime rules that they say would eliminate such pay for 8 million workers, Daschle downplayed the encouraging economic figures.

"We'll take any good news we can get, but the bottom line is jobs," Daschle said. The nation's unemployment rate stands at about 6.1 percent.

At the same news conference, Sen. Tom Harkin, D-Iowa, said the strong economic growth has yet to "filter down" to many working families, and he said the jobless situation remains serious.

"Companies are hiring workers, but they're hiring workers overseas," he said.

Federal labor laws

Democrats and some Republicans are pressing the Bush administration to abandon an overhaul of federal labor laws that Democrats contend will render millions of workers ineligible for overtime pay.

The Senate has included an amendment to block the administration's proposal in the 2004 spending bill for the departments of Labor, Health and Human Services and Education.

The burst of GDP growth was led by a 6.6 percent growth rate in consumer spending, the fastest pace since 1988. Consumer spending grew at a 3.8 percent pace in the second quarter.

Child tax credit checks, along with the proceeds of cash-out mortgage refinancing, fueled the third quarter's boom, which is expected by analysts to fade in the fourth quarter.

--White House Correspondents Suzanne Malveaux in Columbus and John King in Washington contributed to this report.

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