By Sean Loughlin
CNN Washington Bureau
Friday, July 23, 2004

WASHINGTON (CNN) -- When Democrats convene in Boston next week, the central message they hope to deliver on the economy is fairly simple -- things could be better and John Kerry is the man to make that happen.

Whether that theme resonates with voters is another matter entirely, coming at a time when economic indicators are mixed -- with many of them pointing to a recovery -- and much of the nation's attention focused on Iraq and the war on terrorism.

"Kerry's line is, 'If this is the best we can do, we're in trouble,' " said CNN senior political analyst Bill Schneider.

There are some points Kerry and other Democrats can make to bolster their argument -- sluggish wage growth, rising health-care costs and a loss of U.S. jobs under the Bush administration. The Kerry campaign, citing figures supplied by the Bureau of Labor Statistics, puts the loss of jobs under the Bush administration at 3 million.

Democrats, said Thomas Mann, a political expert at the Brookings Institution, can claim that "in spite of an election-year economic recovery," some Americans are struggling.

"Middle and working-class families continue to struggle with stagnant wages, high gas, health care and college expenses and bleaker prospects for good jobs," Mann said, summing up the Democratic mantra.

But Republicans can point to rising productivity, relatively low unemployment and record home ownership to make their case that the economy is on the rebound.

"There is no way you can make a reasonable argument that the economy's not pointed in the right direction," said Marc Racicot, the Bush-Cheney campaign chairman and former governor of Montana.

Alan Greenspan, the powerful chairman of the Federal Reserve, was on Capitol Hill recently with an optimistic assessment of the nation's fiscal health.

Calling developments this year "quite favorable," Greenspan pronounced growing evidence that "the expansion is self-sustaining."

On the campaign trail, President Bush has repeatedly insisted that his administration inherited a developing recession that was exacerbated by the 9/11 terrorist attacks and corporate scandal. His tax cuts, he says, were just the tonic the ailing economy needed.

But Democrats will argue -- as they have for more than a year -- that while the cuts were a boon for upper-income Americans, they did little else. Kerry and his surrogates have painted a picture of America as a country of haves and have-nots -- and only the first group has benefited in any sense under Bush.

Their overall message is something of a challenge. Kerry wants to convince voters that things could be better, without sounding pessimistic, a charge already leveled by Republicans.

"Believing that the loss of 4 million people off health insurance is the best that we can do, pretending to America that this is the best economy that we've had in years is pessimism," Kerry said at one recent campaign stop, the GOP criticism appearing to ring in his ears. "I'm optimistic enough to say that America can do better. We can do better. And we're going to do better."

To that end, Kerry has unveiled a plan to create 10 million jobs over four years. Key parts of that plan include: ending tax breaks that encourage companies to move U.S. jobs overseas, cutting the corporate tax rate by 5 percent and enacting a new jobs tax credit for manufacturing and small businesses.

Kerry also has vowed to repeal part of the Bush tax cuts, saying he would roll them back for "the wealthiest Americans."

There are some signs that Kerry's message has traction.

At a speech this month to Republican governors, GOP pollster Bill McIntyre warned that Bush's message that the economy is getting better did not appear to be as persuasive for voters as Kerry's argument that the middle class is getting squeezed.

And a CNN/USA Today/Gallup Poll released Thursday found that more people believe Kerry would do a better job on the economy than Bush. Specifically, 51 percent of poll respondents said Kerry would better handle the economy, compared with 43 percent for Bush.

The poll also found that the economy was identified by likely voters as the most important issue, although Iraq and terrorism were not far behind.

Still, CNN's Schneider, predicts the economy will not be the pivotal issue for most voters when they head to the polls.

"It's all Iraq," Schneider said. "In 50 years, 2004 will be known as the Iraq election."

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