Bush distances himself from job-loss comment

By Dana Milbank
The Washington Post

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Bush, speaking yesterday at a high school in central Pennsylvania, did not mention the aide by name but expressed his concern about the expatriation of jobs.

"There are people looking for work because jobs have gone overseas," he said. "And we need to act in this country. We need to act to make sure there are more jobs at home, and people are more likely to retain a job."

On Monday, N. Gregory Mankiw, chairman of Bush's Council of Economic Advisers, said in releasing the annual Economic Report of the President that the "offshoring" of U.S. service jobs is "the latest manifestation of the gains from trade that economists have talked about" for centuries.

"Outsourcing is just a new way of doing international trade," he said. "More things are tradable than were tradable in the past, and that's a good thing."

The report similarly said that "when a good or service is produced more cheaply abroad, it makes more sense to import it than make or provide it domestically."

Several economists have defended Mankiw, a Harvard economist, for speaking the economic truth. But his remarks have become a political liability for the president, with even House Speaker Dennis Hastert, R-Ill., a Bush ally, joining the criticism Wednesday.

Mankiw said in a statement Wednesday that his remarks in support of free trade were misinterpreted. "It is regrettable whenever anyone loses a job," he said.

Job loss is a sensitive issue for Bush as he seeks re-election in November. The economy has lost about 2.2 million jobs on Bush's watch and has been slow to reduce unemployment despite other signs of economic growth.

As Bush prepared to fly to Harrisburg, the Labor Department reported that new claims for unemployment insurance last week rose by a seasonally adjusted 6,000, to 363,000, the highest level in two months.

Unemployment has grown to 5.1 percent in Pennsylvania, and some residents were angered by Bush's recent decision to end tariffs on steel imports.
 
White House press secretary Scott McClellan acknowledged before Bush's speech that the president was obliquely addressing the Mankiw controversy. "This president is focused on creating jobs here at home," he said.

Responding to Hastert's criticism, McClellan said: "I think the speaker said something about, it's important that we are creating jobs here at home, and I'm glad he agrees with the president."

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