The Politics of Growth

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WASHINGTON, D.C.: President Clinton called a Rose Garden press conference this morning to announce that the U.S. economy had grown at a heady 4.2 percent from April to June, the fastest growth since 1994. "This is good news for America, more evidence that our economic strategy is working," said Clinton. Investor fears that the Federal Reserve will hike short-term interest rates to ward off the inflation that usually accompanies rapid growth have been eased by reports that inflation is not heating up. (While the GDP rose 4.2 percent, the price index climbed just 2 percent.) In response to this morning's report, the Dole campaign called the President's announcement "a slap in the face" for the American taxpayer, claiming Clinton is presiding over a recovery which is leaving the American worker behind. It's a delicate dance for Republicans who normally applaud brisk economic growth, especially since they have been arguing all year that Clinton's tax increases would strangle expansion. "Politically, this growth figure is just what the White House needed," says TIME's James Carney. "It shoots down the Republican argument that the economy, though it is growing, would be growing faster without Clinton's tax increases. If the economy is doing well, Clinton will take credit for it and will benefit on the campaign trail." While Clinton is well-positioned on a wide range of campaign issues, from crime and anti-terrorism tactics to welfare reform, education and economic growth, his strongest campaign card is his somnolent adversary. "By traditional measures, Clinton is in a very strong position," says Carney. "If he did not have some vulnerabilities, he would be next to unbeatable. As strong as he is, though, Clinton is a fairly flawed candidate, and his support is not deep: voters still have reservations about him. But as long as the economy remains strong, appealing to the voters' pocketbooks, the Republicans will have to work on these reservations if they expect to put Bob Dole in the White House." -->