Democrats Step Up Attack on Bush Economic Record

WASHINGTON (Reuters) - President Bush ( news - web sites) said on Tuesday he was optimistic about U.S. economic strength as Federal Reserve ( news - web sites) policymakers warned of possible further weakness and Democrats stepped up their attacks on the president's record.

After a private business research group reported on Tuesday that consumer confidence declined for a fourth straight month in September, Bush said more work was needed but that with low inflation and low interest rates, the economy had the ingredients for growth.

"You bet I'm optimistic but I understand that we've got a lot of work to do," Bush told reporters after a meeting of his Cabinet. "I'm optimistic about America in general. The American people are resilient, they're strong. We've got the best workers in the world," Bush said.

But Democrats, anxious to focus public debate on the economy as well as a possible war with Iraq ahead of the November congressional elections, said the country could be on the brink of a second economic slump in nearly two years.

"DOUBLE DIP RECESSION?"

"Statistic after statistic makes me think that there is a real possibility for a double dip recession," Senate Majority Leader, Tom Daschle, a South Dakota Democrat, said. "There can be no question, unless we are able to deal more effectively with the economy, it could become a bigger issue than anything else on the horizon."

He made his remarks to reporters as the Federal Reserve policymakers announced they would keep key interest rates steady, but warned the economic outlook was uncertain in the face of rising global tensions over Iraq.

In the Republican-controlled House of Representatives, Democratic Leader Richard Gephardt of Missouri said the economy was suffering its worst performance since the 1950s.

"We've seen the most anemic period of economic growth since Eisenhower was president," he said. "In 18 months, the stock market lost $4.5 trillion in value; more than two million people have lost their jobs. A wave of corporate scandals has eroded people's fundamental faith in our nation's free markets, and scores of corporations have become bankrupt."