A Honeymoon Spat, Already?

For the second day in a row, President-elect Bush's wary outlook on the nation's economy came under fire from the current White House and from Capitol Hill Democrats.

"I have said that there are some warning signs on the horizon. I think people are going to find out that when I'm sworn in as the president, I'll be a realist," Bush said Thursday in Austin, Texas.

"And if there are warning signs on the horizon, we need to pay attention to them, and we need to act in a positive way to make sure that our economy continues to grow so people will be able to find high-paying, high-quality jobs," he added. "One of my responsibilities is to anticipate problems and be prepared to act."

Bush was responding to scathing criticism by Gene Sperling, President Clinton's chief economic adviser, that was also echoed by other White House officials. They contend the GOP drumbeat of bleak economic forecasts could be calculated to sow "unnecessary fear and anxiety" partly for political effect.

"The next president and his team should not be talking down our economy and potentially hurting confidence just to gain short-term political positioning," Sperling said Thursday.

At stake are two factors that seem increasingly on a collision course as Bush prepares to succeed Mr. Clinton in the Oval Office on January 20th. One is the outgoing Clinton administration's legacy of the longest peacetime expansion in U.S. economic history. The other is Bush's push for a 10-year, $1.3 trillion tax cut.

In recent days, Bush has argued his tax cut would give the economy a necessary supply-side jolt.

"They've been looking for a reason to do a tax cut for a long time," said Senate Democratic leader Tom Daschle of South Dakota about the Bush team. "They may have seized upon the best one yet. This certainly adds fuel to the fire."

Democrats on Capitol Hill favor smaller, more targeted tax cuts, and Daschle said many economists favor lower interest rates rather than a tax cut to steady the economy. The Federal Reserve, chaired by Alan Greenspan, signaled this week that interest rate cuts are likely next year. Greenspan is also dubious about the proposed Bush tax cut.

For its part, the Clinton White House has urged Bush not to badmouth the economy, lest he create what Sperling has called a "self-fulfilling prophecy" about a possible downturn. And the last thing the current administration wants is for Bush to somehow blame them for such a downturn, should it happen.

Also Thursday, Bush stepped aside as Texas governor as he races to take the reins of the government in Washington.

"Serving as the governor of the great state of Texas ... has been a higher honor than you can imagine. And there's only one thing that would cause me to leave early, and that is to become your president. So today, I announce my resignation as the 46th governor of Texas... effective this afternoon," he said.

In a veiled dig at President and Mrs. Clinton, who are relocating to New York after their 1992 Arkansas-based run for the White House, Bush said of the Texas governor's mansion: "It won't be our home, but Texas always will be."