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Democrats find a fight to pick

Even with a successful end to the Iraq war in sight, US President George W. Bush faces a growing political challenge at home from the continued struggles of the US economy.

A recent series of downbeat economic reports and forecasts have Democrats envisioning another 1992, when President George Bush, the current president's father, lost re-election after squandering sky-high post-Gulf War approval ratings in the midst of a slumping economy.

With analysts predicting paltry economic growth this year and the possibility of more job losses, Bush will be under intense pressure to begin showing results in time for next year's campaign.

"I think Bush has got six to eight more months, and if the economy and the market haven't clearly turned around then it could become a real albatross for him," said Greg Valliere of Schwab Washington Research.

The elder Bush presided over an economy that was clearly picking up steam before the election in the fall of 1992, but by then public attitudes had hardened and it was too late, Valliere said.

"Bush needs to have the economy and the stock market clearly rebounding by the fall of 2003," he said.

But few analysts see a fast recovery, even with a quick end to the Iraq war. While the economy typically must expand at a rate of 3 percent or more to keep unemployment from rising, GDP grew at an anemic 1.4 percent in last year's fourth quarter.

The estimate of first-quarter GDP, which measures all output within US borders, will be released on April 25 and economists are braced for a paltry figure. To make matters worse, politically sensitive payroll figures show job losses of 465,000 for the last two months.

"If [the growth rate] doesn't get in over three, then the unemployment rate will trend higher and that is going to pose a big problem for the president," said Andy Laperriere, a political analyst at the economic research ISI group who said next year could be better than anticipated.

"My view is that Bush could survive and be re-elected even if the economy is weak as long as it's not terrible," he said. "The consensus among economists is that 2003 will be a weak year but not terrible."

Administration officials, trying to build support for Bush's US$726 billion tax cut proposal being debated in Congress, acknowledge the economy is not firing on all cylinders.

"I think the economy has slowed somewhat and isn't performing where we'd want it to perform," Treasury Secretary John Snow told reporters on Friday.

That sluggishness has Democrats licking their chops. Public opinion polls show the economy is often the leading factor in influencing a person's vote, and Democrats are counting on it becoming the dominant issue in the 2004 race.

"For a Democrat to win, we need the focus to be on the economy," said a strategist for one of the nine Democratic contenders vying for the right to challenge Bush. "Bush can talk about the economy all he wants, but people just don't trust him to manage it."

Analysts say there are several differences between 1992 and 2004 that could help Bush this time, with the lessons he learned from his father's fate leading the list.

"This White House has spent a lot of time trying to understand what happened in 1992 and how to avoid repeating it," said Republican pollster David Winston.

While the elder Bush was widely viewed as indifferent to the nation's economic troubles, his son offered a new economic plan in January even while preparing for war in Iraq.

The public hangover from the Sept. 11, 2001, attacks and the war on terrorism also could work to Bush's advantage, elevating foreign policy and security needs in the political debate and lessening the impact of the economy.
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