A string of glaring missteps by President Bush's economic team has raised alarm among the president's supporters that his economic policymakers may have lost the most basic ability to formulate a persuasive message or anticipate the political consequences of their actions.
In recent weeks, the White House has had to endure its chief economist's positive comments about job "outsourcing," or sending work overseas; controversial passages in the annual Economic Report of the President; questions over the legitimacy of Bush's 2005 budget; a California swing in which Bush bragged about the creation of two jobs in Bakersfield; and a flap over a job-creation forecast that not even the president could stand by.
On March 1, a host of U.S. industries began paying trade sanctions to Europe because Congress and the White House have not replaced illegal export subsidies with new aid for ailing manufacturers.
'Machinery's not working very well'
But the non-naming of Anthony F. Raimondo on Thursday as assistant commerce secretary for manufacturing and services has brought the concerns to a boil.
The long-anticipated announcement of a manufacturing czar was supposed to be a good-news day for a White House struggling with its economic message. Instead the planned, smiling photo op fizzled when it came to light that a year ago Bush's choice had opened a major plant in Beijing.
"Clearly, the machinery's not working very well," said Bruce Bartlett, an economist with the conservative National Center for Policy Analysis, who noted that this White House has been known for its discipline on message.
Republicans on Capitol Hill and in the lobbying world of K Street say that the incidents may be minor, but they are many, each amplified by the last. And they are supplying a steady, nourishing diet for Sen. John F. Kerry (D-Mass.), who has made jobs and Bush's economic policies a centerpiece of his campaign to capture the White House.
Several former administration officials said the debacle over Raimondo illustrated broader weaknesses in Bush's White House as he gears up his reelection campaign. Some Republicans said the situation crystallized their concerns about his weakened political position. These Republicans refused to speak for the record because they said that if they did, they could not be candid about the problems without infuriating Bush and his most powerful aides.
Close scrutiny
These Republicans noted that several key officials who were steeped in Bush's first campaign have moved out of the West Wing or out of the government, and their replacements -- especially in the economic arena -- have weaker political antennae.
"People are doing their jobs, but most of them don't have the authority to do something once they find a mistake," said a former official who stays in frequent touch with the West Wing. "Somebody over there has to take complete and utter responsibility for everything that is publicly released from that White House. And no one is doing that."
They also note that Democrats are drawing scrutiny to errors and inconsistencies that might have passed unnoticed a few months ago. "This is a hyper-charged political environment, and they have not adapted," the former official said.
And Karl Rove, who is on the government payroll as the White House senior adviser, is stretched thin between trying to watch what the administration is doing and overseeing the ramping up of a campaign that has accelerated its plans in response to Kerry's early lock on the nomination.
"There's a trade-off," said a Republican who advises both the administration and the campaign. "It means you end up talking through get-out-the-vote activities instead of looking at every single element of the economic report before it is released."
Personnel issues
A former White House official pointed to other personnel issues. Bush loaded his first economic team with brash, outspoken officials, full of ideas, such as Treasury Secretary Paul H. O'Neill, National Economic Council Director Lawrence B. Lindsey and economic adviser R. Glenn Hubbard, he said.
But those ideas often clashed, and the officials proved too outspoken. So Bush swung the team in the opposite direction, filling it with replacements who would stick to the White House message and keep out of the news. But those officials have not generated fresh policies.
"They've populated the place with an absence of ideas guys, which is fine if you think you can put it on autopilot and win," he said. "But it doesn't look like it's working.
Others say the economic team was kept straight in the first two years by Joshua B. Bolten, the deputy chief of staff for policy. When Bolten left last year to head the White House budget office, the wheels started coming off the operation, one Senate GOP aide said.
Administration officials contend that as the economic recovery takes hold and jobs begin proliferating, Republican concerns will disappear. Treasury spokesman Rob Nichols said that already, the unemployment rate has fallen, disposable income has risen, single-family home ownership is at record levels and worker productivity is high.
But outside the White House, allies are worried. The recent losing streak has the administration "on its heels," said Daniel J. Mitchell, an economist at the Heritage Foundation.
Rich fodder for Democrats
This week, Reps. Robert W. Ney (R-Ohio) and Donald Manzullo (R-Ill.), who represent hard-hit manufacturing districts, requested a meeting with Bush to get him to refocus his economic message. "Let me try to be diplomatic about this," Manzullo said. "The president needs to bring together in a single, simple focus the things he really believes in. He's got the right stuff. He just needs to sharpen the focus."
The flap over Raimondo may be the most glaring breakdown, critics say. He is a well-respected chairman and chief executive of a prefabricated-building manufacturer. But his company -- Behlen Manufacturing Co., of Columbus, Neb. -- laid off 1,180 workers from its five U.S. plants in the past three years while opening a plant in Beijing.
That was only the most recent problem. The release last month of the Economic Report of the President by the White House Council of Economic Advisers has proven to be rich fodder for Democrats, who promise it will appear in ads. First came the flap over a passage that appeared to praise the recent movement of U.S. service jobs to such low-wage countries as India: "When a good or service is produced more cheaply abroad, it makes more sense to import it than make or provide it domestically."
Then, critics turned their attention to the report's anticipation that 2004 employment would on average be 2.6 million jobs higher than last year. The secretaries of commerce and the Treasury, and then the president, quickly backed off that projection.
The outsourcing issue
Finally, Democrats latched onto an obtuse question in the report, "When a fast-food restaurant sells a hamburger . . . is it providing a 'service' or is it combining inputs to 'manufacture' a product?" The point, administration economists say, was to question the practicality of congressional proposals to offer tax breaks to manufacturers. But Democrats accused the White House of wanting to reclassify burger flippers as Joe Lunchpails.
The reactions were unfair, said two former White House officials, but in an election year, they should have been anticipated. They said the extensive vetting process that governed previous report releases must have broken down. "Clearly, people didn't read it," one of the former officials said. "This stuff was not hard to find."
As the White House was putting out those brush fires, officials had to deal with the comments of N. Gregory Mankiw, chairman of the Council of Economic Advisers. Mankiw managed to anger manufacturers, software writers and even radiologists in his extended take on the "outsourcing" of jobs overseas.
"Outsourcing is just a new way of doing international trade," he told reporters. "More things are tradable than were tradable in the past, and that's a good thing."
But administration officials admit that so far, it has been a good thing mainly for Democrats.