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Bush and Kerry Spar From Afar on the Economy

In the Southwest, the president adds up indicators of improvement. In the Midwest, his likely Democratic challenger ticks off signs of decline.

March 27, 2004|Maura Reynolds and James Rainey | Times Staff Writers

PHOENIX — President Bush and Sen. John F. Kerry dueled Friday over an issue that could decide the presidential election -- the economy -- with the president painting a sunny picture of low interest rates and strong business growth, while his presumed Democratic challenger was decrying job losses and increasing poverty.

Although Bush was in the Sun Belt and Kerry in the Rust Belt, the two candidates were in effect debating one another on the national stage. The outcome of the election may hinge on which vision of the economy takes hold in the public mind.

Kerry, who described the economy as in weak condition, unveiled a plan Friday to cut corporate taxes by 5%. The Massachusetts senator said he would fund the proposal by ending a tax break that he said encouraged companies to add jobs overseas, rather than in the United States.

For his part, Bush portrayed the economy as thriving and highlighted rising rates of homeownership -- a trend he said he hoped to foster in a second term, especially among minorities like the largely Latino audiences he addressed Friday in Albuquerque and later in Phoenix.

"Things are improving. Things are getting better," Bush told home builders and local supporters gathered in the adobe courtyard of an agricultural exposition center in Albuquerque. "Thanks to being the most productive workforce in America -- and I might say thanks to good policies -- this economy is strong, and it's getting stronger."

Kerry sketched a starkly different picture.

"This president doesn't have a record to run on, but a record to run from," Kerry told students at Wayne State University in Detroit. "A record of negative job growth and stagnant incomes, with long-term unemployment at its highest level in 20 years and manufacturing jobs at a 50-year low."

"Under President Bush, 3 million more Americans have slipped into poverty and 4 million more have lost their health insurance," Kerry said.

Each candidate added lines to his speech seemingly designed to counter the other. As if answering Bush's claims on high homeownership rates, Kerry said "bankruptcies and foreclosures are the highest they have ever been."

And Bush modified his language on trade issues, making his position sound more like Kerry's: "My attitude is, if our markets are open, I want the other people's markets to be open."

Bush, who has not talked about broadband Internet access in two years, suddenly took up the issue Friday, calling for universal access by 2007 and an end to taxes on broadband access. In his speech two hours later, Kerry also mentioned broadband, pledging to offer a plan to spur the growth of new technologies. For both candidates, the high-tech industry is an important source of financial and electoral support.

Two years ago, Bush promised his administration would work to make high-speed Internet access available in more areas, saying wider deployment of broadband services would help stimulate the economy and create new jobs. But legislative efforts to promote broadband have stalled.

Bush's focus on homeownership is part of a campaign strategy to build a vision of the nation as an "ownership society." Under that vision, Social Security and other programs might be partially replaced by privately owned stock and bond accounts, in which people save for their retirement, healthcare and education.

The homeownership theme also has resonance with minorities, especially Latinos, who are a critical constituency in Arizona and New Mexico -- both front-line states in the election. Bush lost New Mexico by fewer than 400 votes in 2000, and he took Arizona with 51% of the vote.

Bush chose a carpenters union training center for his remarks in Phoenix, where he emphasized that more housing starts meant more jobs for carpenters.

"Housing starts in 2003 were the highest in a quarter of a century," Bush said. "The homeownership rate is the highest ever. And that's fantastic news for America. We want more people owning their own home." The president acknowledged that the homeownership rate is lower for minorities.

"There is a minority homeownership gap in America," Bush said. "Not enough minorities own their own homes. And it seems like to me it makes sense to encourage all to own homes." To that end, Bush pledged $2.6 million in Arizona and $900,000 in New Mexico to help minorities make down payments.

Kerry said his "Jobs First" proposal outlined Friday was the first of many that together would create 10 million jobs over four years.

One aim of the plan is to slow the flow of U.S. jobs to foreign nations. Kerry has railed for months about "Benedict Arnold CEOs" who move operations and jobs to other countries.

Under current federal tax law, companies that earn profits from overseas operations often pay foreign taxes, but they do not have to pay U.S. taxes on that money until it is returned to the United States.

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