Jobs, economy key pocketbook issues in election year
By Mike Madden | Gannett News Service
WAYNE, N.J. — Roy Frank has a master’s degree in business and years of experience in the chemical and telecommunications industries.
But these days, he sells men’s suits at Macy’s, earning less than half of what he used to before a small consulting firm laid him off earlier this year. And if you ask him, the tax cuts President Bush insists will jumpstart the economy are no help.
“You take a look at Bush’s policies … nothing is trickling down,” said Frank, 44, of Clifton, N.J. “He’s not going to get my vote by default.”
A year before voters decide whether to re-elect Bush, the economy already looms as one of the fundamental issues in the presidential campaign. Though the last three months saw a blistering 7.2 percent increase in the nation’s economic output and new jobs added for the first time since Bush took office, people are still worried about holding on to their jobs. Like Frank, many say they’re frustrated about having to take service-sector jobs that don’t pay well. Even some of Bush’s supporters say they’re not sure the administration’s policies are on the right path.
Roy Frank, of Clifton, N.J., sells suits at Willowbrook Mall in Wayne N.J., (Gannett News Service, Rohanna Mertens)
The whole issue touches on one of the most basic questions voters ask themselves when they pick a president: “Am I better off now than I was four years ago?”
The numbers don’t paint a rosy picture, despite some signs of improvement.
More than 2.6 million jobs have been lost during the Bush administration — the worst record on jobs for any president since Herbert Hoover led at the beginning of the Great Depression. Nine million Americans are looking for work without luck. A USA TODAY-CNN-Gallup Poll during the first week of November showed 70 percent of the public rated the economy fair or poor.
The nine Democrats vying for their party’s nomination to take on Bush next year say voters are uneasy enough about pocketbook concerns that Bush could be beaten. Republicans, meanwhile, say the massive $1.7 trillion in tax cuts Bush championed in 2001 and 2003 will turn the economy around well before voters go to the polls.
“Now we will see whether his policies bear fruit,” said Mark Zandi, chief economist at Economy.com, a Pennsylvania-based consulting firm. “It’s certainly borne fruit in the short term. He’s juiced things up — but the question is, will this last?”
Jobs or Iraq?
New economic statistics may herald the beginning of a recovery. In October, employers hired 126,000 workers, adding jobs for the third consecutive month. Nationwide, the unemployment rate in October was 6 percent, down from 6.1 percent in September. A total of 138 million people, out of the country’s population of about 280 million, had jobs in October.
The key question over the next year will be how voters perceive the economy and whether Bush is doing a good job of managing it. The USA TODAY poll showed 47 percent of the public approves of Bush’s handling of the economy, up from 42 percent a month ago.
“I say the economy is getting better,” said Gene Schroeder, a retired general manager of an auto dealership in Oshkosh, Wis. “I think President Bush is doing a fine job in all respects and doing the best job he can. … I will vote the same as my heart feels."
In Bergen and Passaic counties in northern New Jersey, where Wayne is located, the unemployment rate has been the same as or close to the national average. Residents here said they worry that the economy isn’t improving fast enough.
“I don’t spend as much as I used to on clothing,” said Gisela Mercado, 33, a schoolteacher from Haledon, N.J., who has guaranteed job security through her union but still feels uneasy. “My husband and I are saving up as much as we can just in case.”
People around the country raised similar concerns. Gannett News Service and reporters from 53 Gannett newspapers talked to dozens of people across the nation in October to get their thoughts on the economy and the presidential campaign.
David Peek, 29, said Bush is doing a good job when it comes to national security and the war on terrorism. “But I don’t agree with all his economic policies. If the economy doesn’t get better in the next year, it would affect who I vote for,” said Peek, a sanitation worker at the NASA facility in Cape Canaveral, Fla.
Indeed, Peek isn’t alone in believing Bush has focused on Iraq at the expense of the economy.
“With the war going on, it doesn't help,” said Shannon Mann, 25, a waitress and single mother from Holland Patent, N.Y. “Since that's been going on, the economy has been going down.”
No matter who the Democratic candidate against Bush is next year, there will be a dramatic difference in the prescriptions the two parties propose for the nation’s economic woes.
Even in campaigning, Bush pushed massive tax cuts as the best way to stimulate the economy. In 2001 and 2003, he persuaded Congress to pass some of the largest cuts in the nation’s history.
“I think he’s doing a great job,” said Queen Smith, a medical records technician from Hattiesburg, Miss., who voted for Bush in 2000. “I’m satisfied with his work.”
Bush’s cuts included some help for middle-class workers, like a $1,000-per-child tax credit for most families. But they also disproportionately helped the rich by eliminating the tax on inherited estates, reducing those on investment dividends and capital gains, and lowering the rate that the wealthiest taxpayers pay on their income.
Bush "really feels things are getting better, and I think he is addressing the wrong class of people,” said Porter Williams, 61, of Valley Springs, S.D. “As long as the tax breaks go to the wealthy, we are going to lose jobs.”
The Bush tax cuts also contributed to an exploding federal budget deficit, now projected to be over $480 billion in 2004 after years of record surpluses. The deficit will require future taxpayers to pay off interest for decades to come.
But the president says the cuts helped keep the economy from slumping further. New figures on gross domestic product, measured by adding up the total value of goods and services produced in the country, showed the economy grew faster than it had in almost 20 years.
“By reducing taxes, this administration kept a promise,” Bush told a crowd in Birmingham, Ala., during a recent trip to promote his economic policies. We did the right thing, at the right time, for the American economy.”
All the Democrats running for president have called for canceling most of the tax cuts, at least for the wealthiest Americans. That would amount to raising taxes on people who make more than about $200,000 a year.
Former Vermont Gov. Howard Dean and Missouri Rep. Dick Gephardt would roll back all the tax cuts, including some for middle-class taxpayers, because they say the cuts took too much money — and flexibility for other programs — away from the government. Massachusetts Sen. John Kerry, retired Gen. Wesley Clark, Connecticut Sen. Joe Lieberman and North Carolina Sen. John Edwards would only eliminate cuts for the rich.
Instead of the sweeping tax cuts under Bush, most of the Democrats would give targeted tax incentives to employers so they can hire new workers. The idea is to stimulate the economy quickly without adding to deficits in the long term, they say.
With a year of campaigning to go before the presidential election, few voters say they’re paying close attention to the particulars of the deficit or the intricate details of tax cuts. What is more important to them is whether the president has their best interests at heart.
“He needs to keep a positive outlook,” said Eric Lauersdorf, 21, from Sheboygan, Wis. “I think he does a good job with that — (making) sure we’re not going into a panic.”
Political strategists from both parties are already trying to convince voters that their side has the right answer.
The political stakes are high. Voters who say they are worried about the job market say they would be willing to vote for Bush if things turned around.
“We need a president who will stoke up the economy,” said Liz Hanley, a youth services coordinator at the public library in Muskogee, Okla. If Bush could do that, she said, “he might get elected to another four years.”
If the economy does not improve enough, though, Bush may have trouble.
“If I don't see things getting better, that changes whether I am going to vote for the same person again or not, and I don't expect things to get better,” said Melissa Rodriguez, 25, of Fort Myers, Fla.
Democratic candidates have tried not to let Bush take too much credit for the economic growth and pointed out less glowing statistics that they say paint a more realistic picture.
“The letters ‘G-D-P,’ I think, mean exceedingly little to people that are looking for a J-O-B,” said Robert Gibbs, a spokesman for Kerry until he resigned Tuesday. “Numbers are fine. But jobs is what people are looking for, and until they find them, the president is going to continue to be in a lot of economic hot water.”