"There are still some people looking for work because of the recession," Mr. Bush told a crowd at Central Dauphin High School in central Pennsylvania, the fifth-largest U.S. electoral prize, and one that he lost in 2000.
"There are people looking for work because jobs have gone overseas, and we need to act in this country," he said. "We need to act to make sure there are more jobs at home and people are more likely to retain a job."
President Bush also hammered home what sounded a lot like a campaign speech, pointing to his tax cuts as an engine for job creation and advocating fewer rules and new barriers to lawsuits as ways to reduce the costs of businesses.
CBS News White House Correspondent Mark Knoller reports the president appeared to be distancing himself from the chairman of his Council of Economic Advisers, Greg Mankiw, who has come under fire for saying that American business benefits from moving jobs abroad.
Jobs are a sensitive issue in this year's election with more than 8 million Americans out of work. While the U.S. economy is on the upswing, job growth has been slow, creating a sore spot for the Bush campaign.
Mr. Bush's comments came on the same day as a scheduled morning news conference by Senators Tom Daschle, Chuck Schumer, and Hillary Clinton, proposing legislation repudiating - in Clinton's words - "the Bush Administration's position that exporting American jobs overseas is good for the nation's economy."
A resolution backed by Clinton would commit the Senate to develop and adopt legislation to provide "a manufacturing tax incentive to encourage job creation in the United States and oppose efforts to make it cheaper to send jobs overseas."
As she chided the Bush administration, Clinton noted that 2,900,00 private sector jobs have been lost since January of 2001, including 2,800,00 manufacturing jobs - in an economy with the fewest jobs created since the days of the Great Depression.
Daschle - who is Senate Minority Leader - and Sen. Edward Kennedy meanwhile are proposing new protections for workers whose employers send their jobs overseas. Their bill would require outsourcing companies to tell employees and the federal government where the jobs are being sent, how many and why.
Democrats have seized on the Mankiw remark as an opportunity to criticize the economic policies of the Bush administration.
"In a report President Bush sent to Congress this week, he says sending jobs overseas is good for America and good for our economy," said Kennedy. "All I can say is, 'Mr. President, what planet are you living on?' Americans want and need good jobs to support their families - not in Asia or Europe or Latin America or Mars."
Even Republicans were incensed. House Speaker Dennis Hastert, R-Ill., said Mankiw's theory fails "a basic test of real economics." However, White House officials insisted Mankiw's job was not in jeopardy.
Hastert, meanwhile, seemed mollified by a letter he received Thursday from the White House economist Thursday.
In the letter, Mankiw said his comments had been misinterpreted and what he meant to emphasize was the importance of knocking down trade barriers while helping workers who inevitably will lose their jobs to transition into other work.
"My lack of clarity left the wrong impression that I praised the loss of U.S. jobs," Mankiw wrote. "It is regrettable whenever anyone loses a job."
Hastert, of Illinois, said in a statement: "I know that President Bush shares my belief that we need to create a better environment for job creation here in the United States."
Federal Reserve Chairman Alan Greenspan on Wednesday defended Mankiw. Like many economists, Greenspan supports free trade, believing that allowing each country to produce the products it makes best, provides consumers with the benefit of goods at the cheapest prices.
Greenspan and Mankiw have also both advanced the argument that the jobs shipped overseas in manufacturing in recent years are not lost forever because a robust U.S. economy will produce new jobs in different fields. That was the heart of Mr. Bush's message in his 25th trip to Pennsylvania since he became president.
The president highlighted his job growth plan. He has proposed spending $250 million to fund partnerships between community colleges and employers to train workers in high-demand sectors; $100 million to help students with reading, and $120 million to improve math education.