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Bush cites ‘unsettling times’ in housing market

President Bush on Thursday cited “some unsettling times” in the U.S. housing and credit markets as he sought to assure jittery Americans that the economy basically is in good shape despite worries about a recession. [!]
/ Source: The Associated Press

President Bush on Thursday cited "some unsettling times" in the U.S. housing and credit markets as he sought to assure jittery Americans that the economy is holding up well despite worries about a recession.

"I say that the fundamentals of our nation's economy are strong," Bush told a White House news conference.

Inflation is down, markets are steady, unemployment is relatively low, exports are up and corporate profits seem to be healthy, Bush told reporters.

He was asked about concerns by some economists that the housing slump and higher mortgage costs could lead to a recession even in spite of action earlier this week by the Federal Reserve to cut short-term interest rates by a half-percentage point.

"There is no question that there is some unsettling times in the housing market and credits associated with the housing market," the president said. But he said he didn't see that spreading to the broader economy.

Bush said he was optimistic about the economy. "But I would be pessimistic if I thought Congress was going to get their -- and they're not. We're not going to raise taxes," he added.

Pressed on whether he thought there was any risk of recession, Bush said: "You need to talk to economists. I think I got a B in Econ 101."

Still recovering from Saddam
On Iraq, Bush said there was progress in local communities but that people are dissatisfied with the central government.

"Part of the reason why there's not this instant democracy in Iraq is because people are still recovering from Saddam Hussein's brutal rule. Sort of an interesting comment, I heard somebody say, `Where's Mandela?' Well, Mandela's dead because Saddam Hussein killed all the Mandelas."

It was a reference to the charismatic former leader of South Africa who helped reconcile his country after decades of racial division. Mandela is still alive.

Bush also expressed regret that innocent civilians were killed in a shooting Sunday in Baghdad involving guards from a private-sector American security contractor, Blackwater USA. Iraqi officials said at least 11 people died. The president said he wants to find out precisely what happened and that his "thoughts and prayers go out to the families."

"To the extent that innocent life was lost, you know, I'm saddened," he said. "Our objective is to protect innocent life. We've got a lot of brave souls in the theater working hard to protect innocent life."

Bush was asked whether the administration was moving the goal posts on its Iraq expectations, now that the Pentagon has said the some benchmarks that Baghdad was supposed to have met by this November will not be realized until July 2008. "The goals are the same. Achieving those goals has been slower than we thought," Bush said.

Bush opened the news conference challenging Democrats on their proposal for a $35 billion increase in a children's health insurance program. Bush has threatened to veto the bill.

The $35 billion increase for the State Children's Health Insurance Program, called SCHIP, would bring total spending to about $60 billion, or twice the level sought by the administration.

The president requested a simple extension of the current program -- which expires at the end of this month -- if both sides cannot agree on terms of a new measure.

He said that "more than a million children could lose health coverage" if the program is allowed to expire.

Addressing Iran
Bush said he took seriously threats by Iranian President Mahmoud Ahmadinejad. "This is a person that consistently talks about the use of force on Israel, for example, and Israel is our very firm and strong ally," Bush said.

He was asked about a recent statement by France's foreign minister that the international community should prepare for the possibility of war in the event Iran obtains atomic weapons -- although the official later stressed the focus remains on diplomatic pressures.

"I have consistently stated that I am hopeful that we can convince the Iranian regime to give up any ambitions it has in developing a weapons program, and do so peacefully," Bush said. "That ought to be the objective of any diplomacy."

He also defended the decision of New York officials to deny permission to Ahmadinejad to lay a wreath at Ground Zero next week. "I can understand why they would not want somebody that's running a country that's a state sponsor of terror down there at the site," the president said.

'I understand about the emotions'
Bush spoke out for the first time about . He wouldn't comment on legal specifics. The case has attracted nationwide attention.

"The events in Louisiana have saddened me," the president said. "I understand the emotions."

He said the FBI is monitoring the situation, adding: "All of us in America want there to be, you know, fairness when it comes to justice."

Bush repeatedly refused to comment on reports that Israeli planes guided by ground forces attacked an installation -- believed to be the beginnings of a nuclear project -- in northern Syria on Sept. 6.

Asked about whether North Korea was providing nuclear assistance to Syria, Bush said, "We expect them not to."

On other topics, Bush:

  • Said his "feelings are not hurt" by criticism leveled at him in a new book by former Fed Chairman Alan Greenspan. "I respectfully disagree with Alan Greenspan when he says this administration didn't handle the fiscal issues we faced in good fashion," Bush said. Greenspan accused Bush of runaway spending and putting politics ahead of sound economics.
  • Denounced as "disgusting" a newspaper ad by that mocked Gen. David Petraeus, the top U.S. commander in Iraq and accused him of "cooking the books" on Iraq and asking: "General Petraeus or General Betray Us?" Quickly responded Eli Pariser, executive director of the liberal group: "What's disgusting is that the president has more interest in political attacks than developing an exit strategy to get our troops out of Iraq and end this awful war."