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Bush upbeat about steady economic growth

President Bush cited recent upbeat economic reports on Tuesday to promote his domestic agenda.
/ Source: The Associated Press

President Bush voiced concern Tuesday over rising energy and health care costs, suggesting they were clouds over an otherwise sunny U.S. economy.

“The economy of the United States is strong and the foundation for sustained growth is in place,” Bush declared, flanked by members of his domestic policy team after a strategy session on his Texas ranch.

Bush sidestepped a question on interest rate increases by the Federal Reserve, saying “I trust the judgment of Chairman Alan Greenspan.” He spoke ahead of a meeting in Washington at which Fed officials raised short-term interest rates for the tenth time in a row.

“In terms of the effect interest rates will have on our economy, we’re more concerned about energy prices and health care prices,” Bush said.

“Those are the two areas that we see as having a greater effect on ... on the future of economic growth,” he said.

“And that’s why the energy bill’s an important start. That’s why we’ve laid out initiatives that we think will help American families and small businesses deal with the rising cost of health care.”

Bush opened the brief news conference with a statement congratulating the Discovery shuttle team, which successfully landed earlier in the day after a 14-day mission in space.

“It was a great achievement,” the president said. “It was an important step for NASA as it regains the confidence of the American people and begins to transition to the new mission we’ve set out for NASA.”

The president promoted his own policies, including an energy bill he signed the day before in New Mexico that contained millions of dollars of incentives for more energy production.

Oil prices jumped to a new high above $64 Monday before retreating slightly on Tuesday. The high levels reflect the market’s persistent uneasiness about strong demand, tight supplies and a slew of threats to output around the globe. Adjusting for inflation, oil hasn’t been this high since the early 1980s, when prices peaked at just over $90 a barrel.

Bush said that and other domestic agenda initiatives “will help American families and small businesses deal with the rising cost of health care.”

He used the meeting with his top economic advisers to promote the unfinished part of that agenda, including his embattled plan to restructure Social Security.

Bush cited last Friday’s report that the economy created 207,000 jobs in July — the best showing in three months. That followed reports that the economy expanded at a solid 3.4 percent rate in the April-June quarter.

In contrast to Bush’s upbeat assessment, however, public opinion of his handling of the economy is not as positive. An Associated Press-Ipsos poll conducted earlier this month showed his economic approval rating at 41 percent — his lowest rating yet on that poll.

Not all the economic news has been good. Real wages have been stagnant. Economists suggest most of the recent economic gains have gone to higher-income and higher net-worth households. And while job growth has improved recently, the level of U.S. jobs is still not back to the levels before the 2001 recession.

“There’s still some challenges to the economy. And we want the American people to know there are challenges and we’re working to meet them,” Bush said.