Summers: Bush era set stage for economic troubles

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Summers: Bush era set stage for economic troubles

10/12/09

WASHINGTON (AP)— A top White House official issued a robust defense of the Obama administration's recovery policies on Monday with a pointed critique of economic conditions and fiscal policies during the presidency of George W. Bush.

In a letter to House Republican leader John Boehner, White House chief economic adviser Lawrence Summers said President Barack Obama "is committed to not repeating the fiscal mistakes of the last eight years."

Summers' letter was in response to correspondence Obama received last week from Boehner and other top House Republicans, who complained that the administration was having no impact on unemployment and recommended a series of tax breaks to invigorate the economy.

Summers replied that the $787 billion stimulus package that Congress passed at Obama's urging contained a mix of spending and tax relief that helped avert a worse economic downturn. He said that while unemployment now stands at 9.8 percent, the pace of job losses is decreasing from an average of 691,000 jobs per month in the first quarter of this year to a 256,000 monthly average in the third quarter.

"We have walked a substantial distance back from the economic abyss and are on the path toward economic recovery," he wrote.

Boehner, in a statement Monday, said calls by Democrats for more measures to address joblessness "are the wrong approach and an acknowledgment that the first one isn't working."

"We can't afford another trillion-dollar mistake on the back of our children and small businesses," he said.

Summers, in his letter, was especially critical of fiscal policies during the Bush presidency.

"Every major policy enacted during this period violated the principle of paying for new proposals," he wrote. "These policy decisions were the primary driver that turned historic projected surpluses into record deficits."

Summers promised to review the Republican suggestions, which included small business tax exemptions and lowering the 15 and 10 percent tax rates for all taxpayers.

Speaking at an economic conference Monday in St. Louis, Summers said growing unemployment was the most important economic problem facing the Obama administration.

Unemployment has risen faster than most economists would expect based on the severity of the recession, Summers said at the National Association for Business Economists conference. But he credited the stimulus spending with shoring up the economy and slowing the rate of layoffs.

"This is a better picture than most expected six or nine months ago," he said. "We are no longer discussing panics."