Bush Accentuates the Positive at Booming Factory

President Bush sought Monday to allay uncertainties about the state of the U.S. economy, telling employees of a thriving heavy-machinery manufacturing plant that he would press his agenda of tax relief and free trade to further expand America’s prosperity.

“The economy of the United States is strong and ... we’re going to work together to keep it stronger,” the president told several hundred cheering employees at the John Deere-Hitachi Construction Machinery Corp., a joint venture of U.S. and Japanese companies.

But even as he seized the opportunity to recite a litany of recent positive economic indexes, the president expressed concern about the budget deficit and the long-term solvency of Medicare and Social Security, calling on Congress to exercise spending restraint and to summon the political will to support his now-moribund drive to overhaul the retirement program.

Monday’s speech marked Bush’s latest effort to boost his job approval ratings, now at the lowest of his presidency, with most polls showing that voters give him little credit for the improving economy.

That has alarmed Republican lawmakers, many of whom urged the White House to promote the good news more aggressively. Bush did just that on Friday in the White House Rose Garden as he highlighted the creation of 215,000 jobs last month.

He reiterated that statistic Monday, then added: “Our unemployment rate is down to 5%. That’s lower than the average of the 1970s, the 1980s and 1990s. The latest numbers also show the economy grew at 4.3% last quarter. And it has been growing at near that average for more than two years. This economy of ours is on the move.”

Bush also said that home ownership was at an all-time high, and that real disposable income and consumer confidence were up. Moreover, he said, “new orders for durable goods, like machinery, have risen sharply, and shipments of manufactured goods are up as well.”

In seeking credit for the economy’s performance, however, Bush faces something of a balancing act: Because the recent gains in the economy do not apply across the board, an overly rosy portrayal might give the impression that he is out of touch.

Thus, the president lamented high gasoline prices in his remarks, renewing his call for the nation to achieve energy independence by allowing the exploration for natural gas and oil in the Arctic National Wildlife Refuge in Alaska and by expanding domestic refinery capacity.

He did not mention the recent large job cuts in the auto industry.

But he did urge Congress to pass legislation that would require employers to honor their pension promises to retired workers, saying that the versions of such bills in the Senate and the House were not stringent enough and that he would veto any measure that did not meet that condition.

“I’m not going to sign a bill that weakens pension funding for the American workers,” he said.

In promoting global trade, Bush cited the experience of the Deere-Hitachi plant, which manufactures hydraulic excavators used in demolition and home building. The joint venture was formed in 1988.

“This plant is actually ‘insourcing,’ ” he said. “Over the past four years, this factory has taken on production that used to be done in Japan and Mexico. You’ve tripled your workforce. That’s what opening markets means. It means good, steady work. It means good opportunity. In the 21st century, no economy can afford to be an island.”

Bush concluded by telling the supportive audience: “This economy is strong, and the best days are yet to come for the American economy.”

But Democrats were not persuaded by Bush’s upbeat rhetoric, arguing that his policies, especially the across-the-board tax cuts, have disproportionately benefited the wealthiest segments of society.

“Democrats remain focused on the middle-class squeeze of rising prices and lower wages impacting too many working families. Instead of ignoring their problems and pursuing giveaways for special interests, Democrats continue to offer common-sense solutions that will lower their costs for gas, healthcare and a college education,” said Senate Minority Leader Harry Reid (D-Nev.).

Rep. Steny H. Hoyer of Maryland, who is second in command in the House Democratic leadership, said in a statement that Bush’s speech “displayed just how out of touch he and congressional Republicans are with middle-class America. Rising costs and stagnant wages are the economic reality facing most Americans.”

In any event, there may not be much Bush can do about perceptions of his economic stewardship. Former Federal Reserve Chairman Paul A. Volcker, speaking at a luncheon on federal budget policy, said presidents received too much of the credit when the private economy booms and too much of the blame when it went bust.

“The economy is not very reflective of or responsive to presidential policies,” Volcker said.

Times staff writer Joel Havemann in Washington contributed to this report.