President Expects Quick Economic Recovery
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 the President.''
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 mid-April. …