Hillary Clinton, in Policy Address, Will Slam Bush on Economy
By Laura Litvan and Matthew Benjamin
April 11 (Bloomberg) -- Senator Hillary Rodham Clinton, regarded as the front-runner for the 2008 Democratic presidential nomination, plans a series of policy addresses starting with a speech tonight in Chicago, where she will criticize the Bush administration's stewardship of the economy.
``People feel the deck is stacked against them,'' Clinton said in an interview yesterday previewing her speech to the Chicago Economic Club. ``The rich are getter richer, everyone else is marching in place, not making any progress. I don't think that's good for us.''
Clinton, 58, said she wants to see a return to the ``fiscal responsibility'' that was marked by the budget surpluses of the Bill Clinton administration, and wants to see a renewed emphasis on creating jobs in the manufacturing sector.
``We have a very important part of our industrial base that is directly tied to our advantage in weaponry and other military components that I don't want to see us outsourcing,'' Clinton said.
The former first lady, who is cruising to re-election in New York, has spent the last five years in the Senate establishing her own policy credentials and distancing herself from a reputation as one of the most liberal influences in her husband's administration.
Alienating Some
That has alienated some activists in her Democratic base on issues such as Iraq. She voted in 2002 to authorize President George W. Bush to go to war. The economy is safer ground for her, strategists said.
``Any election is by definition a referendum on the economy,'' said David Axelrod, a Democratic strategist based in Chicago. ``She is in a strange position. She is running for re- election, but she is also the front-runner for the Democratic nomination in 2008. She has to move along two tracks and she has to lay down markers for the next campaign. The Economic Club of Chicago is a good forum for that.''
In the interview, Clinton said the stability of the U.S. economy may be threatened by ``skyrocketing'' health-care costs, disappearing middle-class jobs and widening trade and budget deficits.
Asked if the government should step in if Detroit-based General Motors Corp. were to go bankrupt, she said the government could help by relieving for a decade some of the costs automakers bear for retiree health care. In return, she said, they should agree to build more energy-efficient autos.
Toward the Middle
``It would help us keep jobs we can and should keep here, remain competitive in a major industry, but also move us closer toward the kind of energy efficiency we must have, both for our economy and our security,'' Clinton said.
Clinton, who has been moving toward the middle by working with Republicans on issues ranging from health-care information- sharing to foster-care policies, walked a delicate line between assailing Bush's economic policies and trying not to rattle business and more centrist voters.
She criticized the Bush tax cuts as favoring upper-income Americans while refusing to say whether corporate taxes were too low or the 15 percent capital gains tax should be raised.
On whether the tax rates that prevailed at the end of her husband's administration should be restored, she said, ``I'm not sure that that's exactly what we should do, but I think the combination of fiscal responsibility and economic growth proves to be very positive for our country.''
National Security Issues
She was unsparing of the president on some national security issues. Asked about reports that the Bush administration was considering the use of tactical nuclear weapons against Iran, she said, ``I would certainly take nuclear weapons off the table'' as an option.
``This administration has been very willing to talk about using nuclear weapons in a way that we haven't seen since the dawn of a nuclear age,'' she said. ``I think that's a terrible mistake.''
On the revelation last week that Bush authorized the disclosure of classified information on Iraq to a reporter, Clinton said, ``Obviously it was done not just for political reasons,'' but ``to protect the decision makers from being held accountable for some of the information they used in the run-up to the invasion of Iraq.''
Asked if her husband, as president, ever engaged in similar leaks, Clinton said, ``Not that I'm aware of.''
Clinton's policy speeches -- which will also feature an address on energy -- offer her a chance a draw on the positives of the Clinton years, including the economy, said Marshall Wittmann, a senior fellow at the centrist Democratic Leadership Council.
`Credibility' on Economy
``Hillary has credibility on the economic front because she's identified with her husband's presidential administration, when most Americans believed times were good,'' Wittmann said.
Critics say the Clintons take too much credit for the economy during their tenure. Much of the growth stemmed from a ``bubble economy'' caused by speculation in technology and stocks, said William Beach, an economics fellow at the Heritage Foundation, a Washington group that favors limited government. He said 1999 and 2000 in particular were an aberration and should be discounted in assessing the Clinton years.
``We were right there in the middle of a bubble economy that was artificial and it wasn't real,'' he said.
Clinton will give her speech amid a U.S. economy that probably grew at a 4.7 percent annual rate from January through March, according to the median forecast in a survey of economists by Bloomberg last month. Last week, the U.S. Department of Labor said the economy added 211,000 workers in March and the jobless rate dropped to 4.7 percent, matching a four-year low.
Supporting Numbers
Yet Clinton has some key numbers to support her contention that things were better during her husband's administration.
The non-partisan U.S. Congressional Budget Office projected a cumulative 10-year budget surplus of $5.6 trillion when Clinton left office. If Bush's tax cuts are made permanent and Congress approves his requests for defense spending and reform of the alternative minimum tax, the U.S. would see a $3.4 trillion budget deficit in the next 10 years, according to the Center on Budget and Policy Priorities in Washington.
While the Bush administration has overseen a gain of 2.5 million jobs since the beginning of 2001, more than 2.2 million manufacturing positions have been lost during Bush's time in office. The decline of manufacturing jobs, which occupy the middle of the pay spectrum, has widened the gap between low- and high-paying employment in the U.S.
By contrast, over the eight years of the Clinton administration, more than 20 million new jobs were created and manufacturing employment grew by more than 2 million.
Uneven Gains
The ``pillars of the middle class, a stable job with certain benefits if you work hard, are beginning to disintegrate,'' Clinton said.
The wealth of U.S. families barely grew from 2001 to 2004 as the economy emerged from the first recession in a decade and consumers took on more debt, according to a Federal Reserve report released in February. At the same time, the net worth of the wealthiest 10 percent of U.S. families rose to a median $924,100 in 2004 from $887,900 three years earlier, a 4 percent rise, the report showed.
In her re-election bid, Clinton in November will face former Yonkers Mayor John Spencer, attorney William Brenner or Kathleen Troia McFarland, a protégé of Henry Kissinger who hasn't been in public service since working as a Pentagon spokeswoman under Ronald Reagan.
`Polarizing Figure'
Clinton's tendency to polarize voters may be a trouble spot in any national race, analysts say. In a March ABC News/Washington Post poll Clinton had a 46 percent unfavorable rating, to 52 percent favorable. ``She's a polarizing figure,'' said Peter Fenn, a Democratic consultant who advised former presidential candidate John Kerry in 2004.
Clinton hasn't announced her plans for 2008. Recent polls indicate she is preferred over possible rivals for the Democratic nomination.
Clinton's decision to venture today to the Midwest and criticize the Bush economy highlights the emphasis she might make on such comparisons if she vies for the White House, said Lee Miringoff, director of the Marist College Institute for Public Opinion in Poughkeepsie, New York.
``She's not giving this speech in Albany, she's giving it in the Midwest, which will be a key battleground if she runs for president,'' Miringoff said. ``Things are never accidental to her.''