The Oregonian
Wednesday, June 30, 2004
JULIE TRIPP

U.S. Treasury Secretary John Snow pumped hands and stumped for the Bush administration's economic policies during a quick visit to Portland Tuesday.

"The U.S. economy has had its share of difficulties," Snow said of the recession that hit just as Bush was taking office. "But we're beginning to come back now. We're making good progress."

Economic growth and productivity are the strongest they've been in 20 years, consumer confidence is brightening, jobs are being created, and home ownership is at an all-time high, Snow emphasized on several stops during his half-day visit.

Snow talked with mechanics and executives at Oregon Iron Works Inc. in Clackamas, where sections of missile silos destined for Fort Greeley, Alaska, are being manufactured.

A thank you and a handshake from a member of the president's Cabinet "gives you a great sense of satisfaction knowing that you're working on such important projects," said foreman Troy Smith after Snow stopped to talk about the silos above the din on the shop floor.

Robert Beal, Oregon Iron Works president, told Snow that China's hot economy has prompted a buying spree for raw materials that has made steel more expensive and difficult to get. Beal wanted to know what the administration is doing to persuade China to release its set currency rate to let the yuan float at market rates. Such a move could reduce the price pressure and help cool the Chinese economy, he argued.

Snow said he's made it clear to Chinese authorities "from the highest level on down" that the United States is not happy with the artificial price peg on Chinese currency.

"They have announced they will move to a float," Snow said. "But they need some time to do it," as they convert their banking system to a more Western model.

For the most part, Snow focused on a short list of talking points during his visit, which also included stops for lunch with members of the Oregon Restaurant Association and a meeting with editorial writers at The Oregonian before catching an afternoon flight back to Washington, D.C.:

"Unemployment is down in 47 of the 50 states," he said, as about one million jobs have been created in the past three months. That's about half the number of jobs lost nationally during the recession.

In Oregon, 65,000 jobs disappeared during the downturn, and 34,000 have been regained, according to the Oregon Employment Department. Oregon's unemployment rate is 6.8 percent, one of the highest in the country, but far below its high of 8.7 percent a year ago.

"Real disposable income is at an all-time high," Snow said, thanks in part to the administration's tax cuts, which he said should be made permanent. In Oregon, average income per worker dropped for three years beginning in 2000, then inched up in 2003 to $34,442, the Employment Department reported. Oregon income is below its inflation-adjusted high of $34,943 in 1976.

"The deficit is clearly unwelcome," Snow said of the growing national deficit. "It's too large." The deficit is expected to hit $500 billion by year's end. Bush wants to halve it within the next five years by increasing tax receipts as the economy improves and reducing spending, Snow said.

Rising interest rates "are an indication, a validation that recovery is under way," Snow said of increases this spring in mortgage rates and bond yields.

He declined to speculate whether the Federal Reserve Board would raise rates at its meeting today, although an increase is widely assumed to be likely.

The secretary also said that Congress should pass the administration's energy bill to encourage more domestic oil production and lower gas prices; that health costs are too high, partly because "frivolous lawsuits" have driven up malpractice premiums; and that job training is essential because in a changing economy, "some people get left behind."

A handful of pickets protesting outsourcing of jobs appeared outside Oregon Iron Works' gates. Spokesman Scott Ballo of ACT-Oregon said Oregon workers need jobs, "not hypocritical lip service from a Cabinet member who promotes outsourcing."

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