[EdGreene]

Gaffes by Bush Economic Team Worry Conservatives
Sat Feb 21, 2:50 PM ET Add Politics - Reuters to My Yahoo!

By Caren Bohan

WASHINGTON (Reuters) - More than a year after President Bush (news - web sites) revamped his economic team, none of the current players has emerged as a leading spokesman on the economy and conservatives are fretting over a series of election-year gaffes.

The lack of a clear economic voice was underscored last week when officials were forced to back off a jobs forecast unveiled in the Feb. 9 Economic Report of the President.

The forecast called for average job growth of more than 300,000 jobs a month this year -- a figure that exceeds most private forecasts and prompted a slew of Democratic criticism.

Treasury Secretary John Snow, touring the hard-hit Pacific Northwest, was the first to pull away from the figures. White House spokesman Scott McClellan followed suit.

That forced Council of Economic Advisers Chairman Gregory Mankiw, lead author of the report, to row back, even though he had defended the numbers in a Capitol Hill hearing.

Mankiw was already in hot water for remarks that seemed to show approval of the outsourcing of jobs to cheaper labor markets overseas -- a sensitive issue at a time when the factory sector is hemorrhaging jobs.

The controversies had many conservatives cringing over what they saw as public-relations missteps with the economic report, a collaboration of officials from across the economic team.

"The question is, are they wrong or are they just not communicating it effectively? I would suggest it's just more a case of not communicating it effectively," said a Republican congressional aide, who asked not to be identified. "It's easy to throw stones," but the aide wondered why officials did not sit down ahead to vet "the sensitive aspects" of the report.

Democrats, seeing the report as a potential gold mine of ammunition, have also pounced on an academic discussion of whether fast-food jobs should be considered manufacturing jobs rather than service jobs as they are now labeled.

The flap comes as Bush's poll numbers are already slumping amid concerns about the economy and the administration's justifications for invading Iraq (news - web sites).

HANGING MANKIW OUT TO DRY
Many Republicans thought a major shake-up of the economic team was unlikely in an election year because it might make matters worse for Bush.

In December 2002, Bush fired Treasury Secretary Paul O'Neill and National Economic Council head Lawrence Lindsey.

CEA chief Glenn Hubbard left the administration last year and was replaced by Mankiw, a relatively unknown figure until the recent furor.

Stephen Moore, head of conservative Club for Growth, gave Snow high marks and said he would like to see him emerge as more of an economic spokesman.

However, he harkened back to the 1990s and commended former Clinton adviser Gene Sperling for his deftness in both politics and economics and said the Bush administration could use someone with those skills.

Moore was sympathetic to Mankiw's plight.

He and other Republicans felt White House officials made the fuss over the forecast worse by backing away from it. Sticking to their guns, they said, would have conveyed an upbeat view that might have helped Bush.

"I think the White House is really hanging Mankiw out to dry on this," Moore said.

Several Federal Reserve (news - web sites) officials have also come to the defense of Mankiw on outsourcing.

"These days it has become politically incorrect to say certain things -- even if everyone recognizes them to be correct," said Dallas Fed President Robert McTeer. "Outsourcing has become the third rail of economics."

Political analyst Larry Sabato said Mankiw's comment was typical of the split between professional economists and those skilled in politics. "Economists tend to be blunt-speaking and they say exactly what they think even if it's impolitic, and this was horribly impolitic," he said."