WASHINGTON (AP) - President Bush conceded Tuesday that the
recession is causing ``genuine economic distress'' but, in his
annual economic report, predicted a quick recovery that could well
exceed the record-breaking expansion of the 1980s.
``Despite the economic evets of 1990, we have reason for both
hope and optimism in full measure as the nation approaches the next
century,'' Bush said in his introduction to the ``Economic Report of
With the economy in its first recession since the 1981-82
downturn, Bush was less upbeat than last year, when he had
proclaimed the nation's economy to be ``in excellent health'' with
not a hint of a recession in sight.
``The events of 1990 were a reminder that even a healthy economy
can suffer shocks and short-term setbacks,'' Bush wrote.
``I know that in some regions of the country, people are in
genuine economic distress,'' he said.
The administration blamed the recession on the jump in oil
prices and the jolt to consumer confidence that occurred after
Saddam Hussein invaded Iraq Aug. 2. Bush insisted that the downturn
would be short and milder than the other eight economic contractions
since World War II.
Democrats in Congress said the report glossed over major
problems facing the economy, including a bank failures and a
chronic federal budget deficit projected to hit an all-time high of
$318 billion this year.
Michael Boskin, chairman of the president's Council of Economic
Advisers, was questioned sharply by members of the congressional
Joint Economic Committee over whether the administration was not
making a major policy error by failing to offer proposals to deal
with the recession.
``My concern is that I see factors of weakness that were not
present in past recessions,'' said Sen. Paul Sarbanes, D-Md. and
chairman of the committee. ``If the recession is deeper, will the
administration do anything?''
Boskin said the administration was involved in contingency
planning but repeated administration opposition to such Democratic
proposals as job-creating public works programs or cuts in the
Social Security payroll tax.
Boskin said one major drag on the economy, higher oil prices,
had already moderated significantly. He said this, along with lower
interest rates being engineered by the Federal Reserve, should help
speed a recovery, whether or not the Persian Gulf War ends by