By Dan Froomkin
Special to washingtonpost.com
Thursday, February 19, 2004; 9:30 AM

Is the Bush economic team in disarray? The White House went into full backpedal yesterday over a job-growth forecast issued by its own senior economists just 10 days ago that has come to look like political poison.

The forecast issued by the president's own Council of Economic Advisers in the annual Economic Report of the President predicted a huge payroll growth by the end of 2004 -- 2.6 million jobs by some accounts, but actually more like 3.8 million.

So far, Bush's jobs record is not so good. The economy has shed about 2.3 million jobs since he took office.

As Dana Milbank writes in The Washington Post, Bush distanced himself from the forecast yesterday. "Facing the prospect that Democrats would make a campaign issue of Bush's failure to meet his own projections, Bush and top administration officials declined to endorse the 2.6 million jobs forecast. . . .

"White House press secretary Scott McClellan, repeatedly asked about the forecast, played down its significance."

And this is actually the second economic report-related backpedal.

As Milbank notes: "Bush last week retreated from an argument made in the report and in comments by CEA Chairman N. Gregory Mankiw that the expatriation of service jobs could be beneficial."

On the NBC Nightly News last night, David Gregory said, "These missteps may prove costly for the president whose reelection prospects may depend whether his record of job creation improves." (Here's the transcript of his report.)

But what may be more telling was the tone of Tom Brokaw's lead-in: "[T]he White House was correcting its arithmetic on what is expected to be a critical issue in the fall elections: Jobs. Last week, the president issued a report from his Council of Economic Advisers that predicted more than two and a half million jobs would be created this year. That's a big number. And now the White House is rapidly backpedaling. NBC's David Gregory at the White House tonight on the troubling question . . . Where are the jobs?"

On CBS, John Roberts called it "another embarrassing turnaround" for the White House, and added that "critics say the contradiction raises more questions about credibility and leadership." Roberts also said Bush's comments on gay marriage yesterday (see below) were just an attempt to change the subject.

Richard W. Stevenson in the New York Times writes that the White House "was left scrambling to counter the impression of disarray within its economic team and grappling with a new political headache after weeks in which Mr. Bush's re-election campaign has been knocked off balance by a variety of issues. They include the failure so far to find banned weapons in Iraq and questions about the president's service in the National Guard more than three decades ago."

Ken Moritsugu of Knight Ridder writes that "The White House on Wednesday struggled to get its economic message straight."

Tom Raum in the Associated Press writes that "offhand remarks and mixed signals by leading members of his economic team are proving politically embarrassing and handing fresh ammunition to Democrats."

Wayne Washington in the Boston Globe illustrates that last point: " 'They don't know what they're talking about in their own economic policy,' Senator John F. Kerry of Massachusetts, the front-runner for the Democratic presidential nomination, said in Ohio, where unemployment has risen from 3.9 percent to 6 percent since Bush took office. 'Today it's one thing. Tomorrow it's the next. It's the biggest say-one-thing-do-another administration in the history of the country.' "

The Economic Report of the President can be found here. You can also read a partial apologia delivered Tuesday by Mankiw at the National Economists Club. "I learned an important lesson from that experience: economists and non-economists speak very different languages," Mankiw said. "The two languages share many words in common, but they are often interpreted in different ways."

The blogosphere has been alive -- and livid -- with commentary about the job-growth predictions. A leading critic, Brad DeLong, was quoted by Milbank this morning. In a brand-new posting summarizing the issue, DeLong -- an economics professor at the University of California at Berkeley and deputy assistant secretary for economic policy in the Clinton administration -- explains how the forecast actually calls for 3.8 million jobs to be created in 2004.

And DeLong argues that the central flaw, ironically, is that White House economists are dramatically underestimating productivity growth. In any case, the job-growth estimate is twice what most others are predicting.

DeLong writes: "An optimistic payroll employment growth forecast -- a highly optimistic payroll employment growth forecast -- a ludicrously optimistic payroll employment growth forecast -- carries other political dangers that were perhaps not so apparent last November when the forecast was being made. To make a forecast means that one will, in some sense, be disappointed if reality falls short of it. And this week a number of people in the administration have been thinking about whether they want to be on record as saying, 'Yes, I believe that 2.6 million (or, even worse, 3.8 million) jobs will be created in 2004.' And they have been concluding that the answer to this question is 'No.'

"Hence this week's spectacle."

The job forecasting question led to some amazingly contentious back-and-forth at yesterday's press briefing, with NBC's David Gregory taking a major role. Here's an excerpt from the full transcript:

"Q But it would appear, though, that people very high up in this administration didn't have a whole lot of faith in the forecast of the report that went up to Congress just a week ago in terms of the job creation numbers.

"MR. McCLELLAN: Again, it's an annual economic report that is put out by the administration based on the economic modeling and the data that's available at that point in time.

"Q Can you answer the specific question, though? Was this report -- was the prediction of this many jobs, 2.6 million jobs, vetted prior to publication by the entire economic team?

"MR. McCLELLAN: It's an annual report, David. It goes through the usual -- it goes through the usual --

"Q That's not the question. Was it or was it not vetted by the entire economic team?

"MR. McCLELLAN: It's an annual report. It goes through the usual --

"Q So you don't know, or it was, or it wasn't?

"MR. McCLELLAN: Can I get -- can I finish that sentence?

"Q When you answer the question. Let's hear it. What's the answer?

"MR. McCLELLAN: The answer was, it is an annual economic report and it goes through the normal vetting process. And if you would let me get to that, I would answer your question.

"Q -- the full economic team vetted the prediction --

"MR. McCLELLAN: It's an annual economic report. It's the President's Economic Report. But again, the President --

"Q Just say yes or no --

"MR. McCLELLAN: -- it goes through the normal -- it goes through the normal vetting process.

"Q So the answer is, yes. I'm not done yet, I've got another one.

"MR. McCLELLAN: Okay.

"Q Why -- if you're suggesting that people will debate the numbers, that's kind of a backhanded way to say, oh, who cares about the numbers. Well, apparently, the President's top economic advisors do, because that's why they wrote a very large report and sent it to Congress. So why was the prediction made in the first place, if the President and you and his Treasury Secretary were going to just back away from it?

"MR. McCLELLAN: Well, one, I disagree with the premise of the way you stated that. This is the annual Economic Report of the President and the economic modeling is done this way every year. It's been done this way for 20-some years.

"Q So why not -- why aren't you standing behind it?

"MR. McCLELLAN: I think what the President stands behind is the policies that he is implementing, the policies that he is advocating. That's what's important.

"Q That's not in dispute. The number is the question.

"MR. McCLELLAN: I know, but the President's concern is on the number of jobs being created --

"Q My question is, why was the prediction made --

"MR. McCLELLAN: -- and the President's focus is on making sure that people who are hurting because they cannot find work have a job. That's where the President's focus is.

"Q Then why predict a number? Why was the number predicted? Why was the number predicted? You can't get away with not -- just answer the question. Why was that number predicted?

"MR. McCLELLAN: I've been asked this, and I've asked -- I've been asked, and I've answered.

"Q No, you have not answered. And everybody watching knows you haven't answered.

"MR. McCLELLAN: I disagree."

Blogger Billmonloved it.

"Thanks to WMD snipe hunt and the AWOL story, we seem to have passed some kind of watershed in terms of the press's willingness to challenge the White House's credibility. And it's spreading to other issues -- including Bush's biggest vulnerability of all, the jobless recovery.

"Angry rottweilers they still are not. But at least the boys and girls on the bus are starting to nip at Shrub's heels a little bit."

Robert Kuttner had a column in the Boston Globe a few days ago in which he argued: "The press has at last given itself permission to be tougher on misrepresentations that have characterized the Bush presidency since its beginnings.

"Once a president loses a docile press, he seldom gets it back. It's good to see the media doing their job again."

Timothy M. Phelps, the Washington bureau chief for Newsday, recently made a similar point: "Something changed in Washington last week, and it wasn't the weather.

" 'When the press smells fear, they start acting differently,' said one Washington Democrat who has witnessed such carnage before."

I haven't heard any reaction from the White House about any change in attitude among the press corps.

But the corps -- or at least the gang that hangs out in the basement of the West Wing, peppering McClellan with questions -- has a critic amongst them.

He's a fellow named Jeff Gannon, the "White House correspondent" for an outfit you've never heard of called Talon News.

On his own web site, jeffgannon.com, he has a section called "Behind Enemy Lines: Stories from inside the White House Briefing Room." The latest entry is "WH Press Corps Hits New Low." Last week, Gannon says, "The White House press corps showed there is perhaps no depth to which it will not sink in order to undermine a presidency."

Within the press corps, Gannon is known for asking softball questions. Here's an example from yesterday. McClellan was fending off hardballs about whether the president should be held responsible for the job-growth predictions when he nodded to Gannon.

"McClellan: I think we've been through this issue. [Nod to Gannon] Go ahead.

"Gannon: Scott, when you talk about the unemployment -- or the jobs being created, is that based on the payroll survey, or the household survey? Because there's -- because of the tax cuts, there's been a tremendous increase in the number of entrepreneurs that have started their own businesses, and those numbers aren't reflected in the payroll survey.

"McClellan: That's correct, yes. The household survey is different from the payroll survey. And the household survey showed that some -- an increase of 496,000 jobs in January alone. So there are different numbers that you're talking about there. And we can look at both. But, again, you're getting into -- you're getting into the numbers here. The numbers that the President is interested in is the actual numbers of jobs being created and the policies that we are taking to create an even more robust environment for job creation."

The Talon News chair in the briefing room, by the way, is one of the issues that led irate Oregon resident Eileen Smith to set up a new weblog yesterday devoted to putting the White House Correspondents Association -- instead of the White House -- in charge of credentialing the White House press. [Note: subsequent reporting has found that Talon News does not have an assigned chair in the briefing room.]

Meanwhile, David Shaw, the Los Angeles Times's media critic, weighed in last weekend with his thoughts on the corps: "[I]t seems to me that a confluence of circumstances and events (the tragedy of 9/11, the public's growing disdain for the media, the growth of alternate news forms and forums, the Bush administration's scornful attitude toward journalists) have made the traditional media more compliant -- and have enabled the Bushites to ride roughshod over them."

And Eric Alterman and Michael Tomasky in the American Prospect, wrote: "Yes, Bush has bullied the national media. But are they really powerless? Only if they play along. Herewith, five suggestions for how the Fourth Estate can stop the charade."

Do any of you know of blogs that are "adopting" members of the White House press corps? If you do, e-mail me at froomkin@washingtonpost.com.

Michael Isikoff and Mark Hosenball write for Newsweek: "Faced with presidential resistance to turning over highly sensitive intelligence briefs, the commission investigating the September 11 terror attacks tried to learn the details in the documents by obtaining access to White House transcripts of interviews that senior officials gave to a prominent journalist, NEWSWEEK has learned."

The journalist? Bob Woodward, whose book "Bush at War" was based on remarkable access to White House players and documents.

Isikoff and Hosenball write that "members of the federal panel repeatedly brought up the Woodward interviews as evidence of the administration's hypocritical approach toward secrecy. How, commission officials demanded to know, could the White House deny a federal panel investigating the worst crime in U.S. history access to documents that it had already shared with a journalist?"

Richard Benedetto reports in USA Today that "Bush's job approval has been steady this month, but some scores on personal qualities have dipped, according to a USA TODAY/CNN/Gallup Poll taken Monday and Tuesday." The poll showed both Senators John Kerry and John Edwards with double-digit leads over Bush. See the full poll results.

Terry Moran got an interview with Laura Bush. "For the first time, first lady Laura Bush is speaking out on the controversy surrounding the president's service in the National Guard decades ago -- before she met him.

"She says she's absolutely certain her husband was fulfilling his duty at the time 'because he told me he was. And the records had been shown. He wouldn't have gotten an honorable discharge if he hadn't pulled his duty,' she said in an exclusive interview with ABCNEWS." Here's video.

So is that the last we'll hear of the controversy over Bush's military service?

As blogger Calpundit ruefully observes, "The 'full release' of documents last Friday seems to have shut everyone up."

But over on Salon.com, Eric Boehlert weighs in again -- although he says the picture remains the same: "There's simply no data available to knock down the assertion that for months at a time Bush failed to show up for required Guard duty. Instead, a picture continues to emerge of a trained Guard pilot who in 1972, two years before his six-year commitment was up, decided to not only walk away from his flying duties completely, but to serve as little as possible in the Guard, before getting permission to leave in order to enroll in Harvard Business School."

David Corn in the Nation was also unimpressed by the new documents.

Blogger Code Name: Monkey thinks he's got some good questions.

Steve R. Weisman writes in a New York Times news analysis that "diplomats and even some in the administration" worry that the White House's resolve to turn over control of Iraq by June 30 "reflects more concern for American politics than Iraqi democracy. . . . Many in the administration say that while they have no proof that the urgency to install a government is politically motivated, it feels to them like part of a White House plan to permit President Bush to run for re-election while taking credit for establishing self-rule in Iraq."

Guy Gugliotta and Rick Weiss write in The Washington Post: "In two independent reports released yesterday, groups of prestigious scientists raised concerns about the role of politics in the formulation of Bush administration science policy and urged greater oversight by independent organizations. "

In the New York Times, James Glanz writes about the Union of Concerned Scientists and Andrew Revkin writes about the National Research Council.

Here's the National Research Council report on climate change; and the Union of Concerned Scientists report and letter.

The Washington Post's "Reliable Source," Richard Leiby, trolls through the latest release of documents from the treasure-trove former Treasury Secretary Paul H. O'Neill's turned over to author Ron Suskind. Suskind's books, "The Price of Loyalty" is No. 1 bestseller on the New York Times hardcover non-fiction list. The new documents show how hard Michele Davis, formerly Treasury's assistant secretary for public affairs, tried to script the fundamentally unscriptable O'Neill.

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