President Bush used the R-word - "recession" - for the first time to describe some areas of the economy, but he said he would veto any big, new, quick-fix spending plans from Congress to curb it.
Although Bush finally stopped tiptoeing around the bugaboo word in a PBS-NPR interview with David Frost taped for broadcast Wednesday, he predicted that the recession would be "mild" and would last not more than six months."We're in a slowdown economically in this country, if not recession," Bush said during Tuesday's taping. "In some areas, we're clearly in a recession, and this concerns me because people are hurting."
Bush's assessment came against reports of a steadily declining domestic economy - driven down in large part by the oil crisis touched off by the Iraqi invasion of Kuwait - and increased unemployment.
Many economic forecasters have predicted the current economic slowdown would continue through the middle of 1991.
Michael Boskin, the chairman of the Council of Economic Advisers, said Wednesday on the NBC "Today" program that "the economy probably has entered a recession. I believe it will be relatively short and that the worst quarter of decline probably was in the quarter just completed on Monday."
Boskin blamed the Persian Gulf crisis for much of the economy's problems and said the sooner the situation in the Middle East is resolved, the sooner the economy will improve.
"I should point out that had the president not organized the international coalition and gotten the troops to Saudi Arabia, Saddam Hussein would have stood poised to either directly take over the Saudi fields or threaten them, and the oil shock would have been far worse and the economy would be heading for much worse," Boskin said.
"The longer the situation remains unresolved, the longer oil prices will remain higher, and that part of the problem in the economy will continue," he said.
The National Bureau of Economic Research, an independent group that calls the shots on the economy, said last week that it would officially announce its opinion on the slowdown in January but that indications were it would pronounce a recession.
Without being specific, Bush made it clear that he favored long-range plans rather than any fast, high-cost measures to bolster flagging sections of the economy.
"These short-range government spending answers have historically proved counterproductive, and I will not embrace them.
"And if they send them down from Capitol Hill, a lot of big, new spending programs, I will veto them."
Bush said he believed, and thought most economists believed, that "the recession will be mild and that the whole country will come out of it, in not too many months from now."
Saying that lower interest rates - "and they are starting down" - would be the best antidote to recession, the president said he did not think the downturn would be long-lasting. "The projections of most of the blue chip projectors seem to indicate" a duration of six months.
"I see no evidence of a deep recession," the president said. "In fact, as we talk, I see evidences of some pockets of our economy that are extraordinarily strong."
Bush faces an economic outlook featuring a sputtering residential and commercial real estate construction, falling housing prices, rising unemployment and rising prices for consumer goods. Financial institutions have tightened credit.
Until the Iraqi invasion of Kuwait on Aug. 2, the economy still was growing, albeit at a slower pace, and economic expansion still was alive.
But that changed as Iraqi soldiers poured into Kuwait, sending the oil-rich nation's leaders into exile and the global economy into fits.