Bush Says Economic Foundations Strong

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President Bush says he is confident of the long-term foundations of the economy despite the credit crunch. He says mortgage giants Fannie Mae and Freddie Mac would remain in private hands and should have access to Treasury credit lines.

ROBERT SIEGEL, host:

President Bush addressed the topic of Fannie and Freddie today at a White House news conference. The president said that two companies' stock will remain in private hands. And he echoed Ben Bernanke pushing Congress to pass legislation that would give the two companies access to an unlimited credit line. In general, Mr. Bush expressed his confidence in the U.S. economy.

NPR's Don Gonyea reports from the White House.

DON GONYEA: This is not the way a president wants to begin a session with reporters.

(Soundbite of press conference)

President GEORGE W. BUSH: It's been a difficult time for many American families who are coping with declining housing values and high gasoline prices.

GONYEA: But this president, looking at this final six months in office, also wanted to highlight what good he could find.

Pres. BUSH: Yet despite the challenges we face, our economy has demonstrated remarkable resilience. The unemployment rate has risen; it remains at 5.5 percent, which is still low by historical standards.

GONYEA: One thing the White House did this year to give the economy a boost was to push a tax rebate to give money to back to consumers. Checks for $1,200 were sent this spring to those filing jointly, individuals got $600. But the impact hasn't been as big as hoped. Latest retail sales reports show an increase of just one-tenth of one percent for June, less than expected. The president was defensive when asked if he still insists the nation is not headed into recession.

Pres. BUSH: All I can tell you is we grew in the first quarter. I think I'm holding a press conference here and that same question came about assuming that we weren't going to grow. But we showed growth, it's not the growth we'd like, we'd like stronger growth. And I…

GONYEA: The president was asked if he'd consider yet another economic stimulus package before he leaves office. He didn't rule it out, but he said he'd wait to see the full effects of the tax rebates. Also at the news conference, he resumed his push for oil exploration offshore on the Outer Continental Shelf. He said he recognizes that such exploration won't have any immediate impact on gasoline prices, and he wouldn't predict when or if prices might begin to come down.

Pres. BUSH: I heard somebody say, well, it's going to take seven years. Well, if we had done it seven years ago, we'd have - be having a different conversation today. I'm not suggesting it would've completely created a, you know, change the dynamics in the world, but it certainly would've been - we'd have been using more of oil and sending less money overseas.

GONYEA: And the president expressed frustration that Congress has not given its permission for drilling in places like Alaska's Arctic National Wildlife Refuge. Then, the president was asked, why he hasn't done more using the megaphone of the presidency to ask the American public to conserve energy more aggressively. The reporter is Mark Smith of The Associated Press.

Mr. MARK SMITH (Reporter, The Associated Press): Why have you not, sir, called on Americans to drive less and to turn down the thermostat?

Pres. BUSH: They're smart enough to figure out whether they're going to drive less or not. I mean, you know, it's interesting what the price of gasoline has done is it caused people to drive less, that's why they want smaller cars, they want to conserve. And the consumer is plenty bright, Mark.

GONYEA: The president then added…

Pres. BUSH: And, you know, people can figure out where they need to drive more or less. They can balance their own checkbooks.

GONYEA: The news conference included a few questions about Iraq and Afghanistan, but the economy dominated. It's a topic that has become just as difficult for the president as the wars. He described himself again as an optimist, but he is also watching his term wind down with little time for a real turnaround on any of these fronts before he turns the key over to his successor.

Don Gonyea, NPR News, the White House.

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Bush Says He's Prepared To Reassure Markets

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President Bush addresses reporters at a news conference Tuesday at the White House. i

President Bush addresses reporters at a news conference Tuesday at the White House. Tim Sloan/AFP/Getty Images hide caption

itoggle caption Tim Sloan/AFP/Getty Images
President Bush addresses reporters at a news conference Tuesday at the White House.

President Bush addresses reporters at a news conference Tuesday at the White House.

Tim Sloan/AFP/Getty Images

Seeking to restore confidence in the nation's ailing economy and financial sector, President George Bush acknowledged Tuesday it is a "tough time" for many Americans, but said his administration was prepared to do whatever is necessary to reassure the markets.

"I think the system is basically sound, I truly do," the president said, speaking to reporters at the White House press briefing room, adding that he realized "there's a lot of nervousness."

Amid soaring gas prices, the most depressed real estate market in decades, falling home prices and tight credit, Bush defended his administration's efforts to stabilize the economy.

He lent his support to a plan to prevent the publicly traded, government-sponsored Freddie Mac and Fannie Mae from collapsing under the weight of their bad loans.

The bailout would allow the Federal Reserve to extend a line of credit to the troubled lenders, which between them hold or guarantee $5 trillion worth of U.S. home mortgages.

"I don't think most Americans realize how important Freddie Mac and Fannie Mae are," Bush said. "We must ensure they can continue providing access to mortgage finance."

The president's news conference came as Federal Reserve Chairman Ben Bernanke appeared before the Senate Banking Committee to explain the Freddie and Fannie plan.

Bush repeatedly referred to the Fed measures as temporary. He also signaled that there was no immediate plan for a government takeover of Freddie and Fannie, saying the administration would "work to ensure they remain shareholder-owned companies."

Asked whether the government might try a similar rescue for other troubled firms, Bush said, "I don't think the government ought to be involved in bailing out companies."

Many critics, however, have argued that the rescue plan effectively forces taxpayers to cover shareholders' losses.

The president also took the opportunity to bash lawmakers for not moving more quickly to open up offshore drilling to bring down high fuel prices. Earlier this week, Bush lifted an executive ban on drilling that was put in place while his father was president.

"The only thing standing between the American people and these vast reserves is action from Congress," he said. He later added that people should conserve and "be wise" about how they use gas and energy.

Bush admitted that tapping fresh domestic reserves would have little or no immediate effect on the price of gasoline at the pump.

"I readily concede it won't produce a barrel of oil tomorrow, but it will reverse the psychology," he said.

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