MILWAUKEE – Jobs and the economy took center stage in a dispute between President Bush and Sen. John Kerry, D-Mass., Friday as each candidate argued he would be a better steward for America.

Bush was put on the defensive as Kerry declared the economy “has a bad case of the flu and we need a new medicine” in a speech at the Milwaukee Area Technical College.

But Bush fired back from Cedar Rapids, Iowa – and again from Oshkosh, Wis. – that Kerry “didn’t seem to get it” in their third debate when Bush said there was a “vital link between education and jobs.”

Kerry continued to argue in Friday’s speech Bush is neglecting the middle class and favoring the wealthy with policies that encourage outsourcing jobs to other countries, depress wages and boost the deficit to record levels.

“The problem is, this president either just doesn’t understand what’s happened to our economy or he understands and he just doesn’t care,” said Kerry, who plans to make a series of speeches targeting middle-class concerns in the final days of the presidential campaign.

Kerry sarcastically questioned how Bush could say he was proud of his record.

“Proud of millions of Americans unemployed? Proud of tens of millions who have no health insurance? Proud of millions of families facing rising costs and falling incomes? And he’s proud and he said this on the very day – the very day – the federal government announced the largest deficit in American history,” the senator said. “If that’s what he’s proud of, I’d hate to see what he’s ashamed of.”

The argument over the economy took place in two key battleground states, Wisconsin and Iowa, where the race is extremely tight. A recent Chicago Tribune poll indicated Bush had a slight advantage over Kerry in Iowa and Kerry led Bush in Wisconsin. Both results were within the poll’s 4.4 percentage point margin of error.

At an indoor arena rally in Iowa, Bush talked about the “vital” education-jobs link and Kerry’s comment in this week’s debate.

“He said, “I switched away from jobs and started to talk about education.’ No, good jobs start from good education,” Bush said.

“One of the best ways to keep jobs in America is to make sure our workforce is educated, the most highly skilled, the most creative and the most innovative in the world,” he said.

In trying to draw distinctions between himself and Kerry, Bush sought to return to his 2000 campaign theme of heading a government that was compassionate but conservative.

“I don’t believe in big government and I don’t believe in indifferent government. I’m a compassionate conservative,” Bush said. “I believe in policies that empower people to improve their lives. I do not believe in policies that try to run people’s lives.”

Campaign aides said Bush will deliver what one called a “significant” speech Monday on the administration’s effort in the war on terror, as well as a speech on health care later in the week.

Campaign aides said internal studies show voter resonance to Bush’s charges Kerry is trying to create a government-run health plan to expand the availability of health care – something the Democrat has strenuously denied.

White House aides had little to say, meanwhile, about reports Bush’s senior adviser, Karl Rove, had testified before a federal grand jury probing the leak about a CIA operative to syndicated columnist Robert Novak.

White House Press Secretary Scott McClellan said the administration is cooperating in the investigation and said the president wants to get to the bottom of the leak.

“My client appeared voluntarily before the grand jury and has cooperated with the investigation since it began,” Rove’s attorney, Robert Luskin, told Time Magzine. “He has been assured in writing as recently as this week that he is not a target of the investigation.”

Democrats pounced on the news, urging Bush to require Rove to disclose what he knows.

“Two and a half hours is a long time to spend in front of a federal grand jury – a lot of information must have been shared,” Democratic National Committee Chairman Terry McAuliffe said.

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