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Treasury chief's remark refuels fight over loss of U.S. jobs

By Martin Crutsinger
The Associated Press

	John Snow
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Snow's comments in economically hard-hit Ohio were published as President Bush was delivering a speech defending his free-trade policies in Wisconsin, a state that has lost 80,000 manufacturing jobs.

Sen. John Kerry, the presumed Democratic presidential nominee, is hoping to capitalize on Americans' concern about an economic recovery in which job growth has lagged badly and more than 3 million manufacturing jobs have been lost since mid-2000.

Asked in a newspaper interview whether he thought outsourcing jobs to other countries made the U.S. economy strong, Snow replied, "It's one aspect of trade, and there can't be any doubt about the fact that trade makes ... America strong."

A recent Associated Press poll showed that the economy is the most important issue to voters and that 53 percent of those surveyed think Kerry is best suited to create jobs.

Bush told an audience in Appleton, Wis., yesterday that he understood there was concern about jobs going overseas. "For some people looking for work, I understand that," he said.

But Bush said the way to confront the problem was to "make sure America remains the best place in the world to do business," rather than resorting to "economic isolationism" by erecting barriers to the U.S. market.

	LUKE FRAZZA / AFP/GETTY IMAGES President Bush arrives on stage yesterday in Appleton, Wis., where he defended his free-trade policies and warned against what he termed "economic isolationism."

The president has been using the phrase "economic isolationism" to attack Kerry's trade proposals including the Massachusetts senator's promise that he would re-examine all of the country's trade agreements in his first 120 days as president to make sure they are fair to U.S. workers.

Snow's remarks were similar to comments that N. Gregory Mankiw, the president's chief economic adviser, made last month. Mankiw had said the outsourcing of jobs would probably be a long-term benefit for the United States. He later apologized for comments he said were misinterpreted and made him appear to be insensitive to the issue of job losses.

Both Bush and Snow insisted the best approach was the administration's policy of pushing for free-trade agreements as a way to tear down barriers to U.S. goods around the world.

However, they are having to make that argument at a time when worries about outsourcing have grown.

In his interview with The Cincinnati Enquirer, Snow said the answer to the problem of jobs moving to lower-wage countries was to promote stronger U.S. economic growth.

"If we can keep the American economy strong and growing and expanding, we'll create lots of jobs. We always have," he said, seeking to address fears that many lost manufacturing jobs will never come back.

Worries also are growing that highly paid white-collar workers could be vulnerable to having their jobs sent abroad as well.

"There is no difference from an economic standpoint from outsourcing manufacturing jobs, which we have been doing for 20 years, and outsourcing white-collar service jobs — except college-educated workers whine louder when they lose their jobs," said David Wyss, chief economist at Standard & Poor's in New York.

Kerry last week proposed a major change in corporate-tax policy that would eliminate a $12 billion annual benefit U.S. companies receive by being able to defer taxes on income earned from their overseas operations. He referred to "Benedict Arnold" companies that get tax breaks for moving jobs overseas.

Kerry wants Congress to halt the tax-deferral option for companies making products to import back into the U.S. market and use the savings to lower the corporate income-tax rate from 35 percent to 33.25 percent. Economists have questioned how much impact Kerry's proposal would have in halting job losses.

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