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Bush defends his economic policy

Kerry blasts 'failed' approach

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George W. Bush
White House

CLEVELAND, Ohio (CNN) -- President Bush traveled to the battleground state of Ohio Wednesday to defend his economic agenda, which has taken a pounding from Democrats in recent months.

In a speech in Cleveland, Bush said the U.S. economy was changing and that the government had a responsibility "to create an environment that increases more jobs and helps people find the skills to fill those jobs."

Bush took issue with critics who he said have a "tired, defeatist" attitude in supporting higher taxes, more spending and protectionist trade barriers that are "a recipe for economic disaster."

"They never get around to explaining how higher taxes would help create a single job in America, except maybe at the IRS," Bush said.

"They don't explain how closing off markets ... would help the millions of Americans who produce goods for exports or work for foreign companies right here in the United States."

Administration aides said Bush wanted to launch a new explanation -- and defense -- of his economic approach in one of the major industrial states where the debate over trade policy, and so-called "outsourcing" of jobs to lower-wage overseas locations, is most emotional.

On the Democratic campaign trail Sen. John Kerry, the party's presumptive nominee, described Bush's economic policies as failures.

Kerry had a face-to-face meeting Wednesday with one of the rivals he vanquished during the primary season, former Vermont Gov. Howard Dean, whose supporters and donors he has been trying to woo. He also visited the headquarters of the Democratic National Committee for what DNC Chairman Terry McAuliffe called "a great discussion" about strategy for the fall.

Dean did not offer an endorsement of Kerry and emerged from the meeting without speaking to reporters. But he later issued a statement describing their conversation as "a very good meeting," saying he would "work closely" with Kerry to beat Bush in November.

Kerry, looking to keep his momentum at full speed, faced something of a jolt when a comment he made -- calling certain Republicans "crooked" -- was captured by the media.(Full story)

Meanwhile, Sen. John McCain, R-Arizona, found himself briefly in the spotlight when he appeared to entertain the notion that he could be Kerry's running mate.

But his office later released a statement making it clear that the maverick Republican was not interested in the Democratic running mate slot.

But the day's primary focus on the campaign trail was the economy.

The administration has been under fire over the outsourcing issue since a top White House economist appeared to suggest last month that the migration of jobs overseas was a good thing.

N. Gregory Mankiw, chairman of the president's Council of Economic Advisers, later said his comments were taken out of context. (White House works to defuse criticism on jobs report)

The issue could be critical the election. According to a CNN/USA Today/ Gallup poll released Wednesday, six in 10 Americans say that keeping jobs from going overseas will be a very important issue in their vote for president this November.

Kerry told a gathering of the AFL-CIO in Chicago, Illinois, that Bush is quickly losing support for his agenda.

"It's got to be getting lonely for George Bush. It seems he's the last person left in America who actually believes his failed policies will ever work," Kerry said.

"We have a president who seems content to see the quality of life in America go backwards, not forwards. I'm not."

Kerry traveled to Ohio recently to promise a more aggressive approach to protecting American jobs, including a government requirement that workers be given three months' notice if an employer decides to eliminate a U.S. job in favor of outsourcing it to a cheaper overseas labor market.

He has also promised tougher enforcement of trade laws and has proposed steering government contracts to U.S. firms, ending tax credits that reward American companies that move offshore and providing new tax credits to encourage new manufacturing jobs in the United States.

Ohio went for Bush in the 2000 presidential election by only 4 percentage points, and no Republican has ever won the White House without picking up the state's electoral votes.

Kerry's campaign plans to fight hard for votes in the state, which has lost manufacturing jobs and has an unemployment rate of 6.2 percent -- above the national average of 5.6 percent.

Bush said higher productivity leads to higher wages and makes U.S. products more competitive in the global market.

But he said it also creates economic challenges, because it takes fewer workers to do the same amount of work.

He said it was important for American workers to get the education and training they need to be more productive.

In acknowledging anxiety over manufacturing job losses, outsourcing and rising health and retirement costs, Bush drew a parallel to 15 or 20 years ago, when the rise of the Japanese auto industry had some people predicting the end of the U.S. automotive sector.

Bush noted that 10 percent of Japanese car maker Honda's workforce is in Ohio "because of the quality of our workers," and that companies based overseas employ an estimated 6.4 million Americans.

Bush also extolled the virtue of "free and fair trade" and suggested other steps are necessary to add more vitality to the economy.

He said those include making his 10-year tax-cut package permanent, lowering energy costs, reducing regulation, controlling health care costs and reforming medical malpractice and legal liability.

CNN's John King contributed to this story.

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