ECONOMY
Documents & Texts from the White House
18 January 2008
President Bush Discusses Economy, Growth Package
THE PRESIDENT: Over the past several months I've held a series of meetings
with my economic team on the outlook for the U.S. economy. And before I
left for the Middle East, I directed them to conduct a thorough assessment
of our economic condition, consult with members of Congress, and provide me
with their recommendations about any actions we might need to take.
The economic team reports that our economy has a solid foundation, but that there are areas of real concern. Our economy is still creating jobs, though at a reduced pace. Consumer spending is still growing, but the housing market is declining. Business investment and exports are still
rising, but the cost of imported oil has increased.
My administration has been watching our economy carefully. My advisors and many outside experts expect that our economy will continue to grow over the coming year, but at a slower rate than we have enjoyed for the past few years. And there is a risk of a downturn. Continued instability in the
housing and financial markets could cause additional harm to our overall economy, and put our growth and job creation in jeopardy.
In recent months, we've taken steps to shore up the housing market, including measures to help struggling homeowners avoid foreclosure and to
keep their homes. I've also asked Congress to pass legislation to
modernize the Federal Housing Administration and enable it to provide
additional assistance to struggling homeowners. The House passed a bill
and the Senate passed a bill, and now they need to get together and get a
bill to my desk as quickly as possible.
After careful consideration, and after discussions with members of
Congress, I have concluded that additional action is needed. To keep our
economy growing and creating jobs, Congress and the administration need to
work to enact an economic growth package as soon as possible.
As Congress considers such a plan, there are certain principles that must
guide its deliberations: This growth package must be big enough to make a
difference in an economy as large and dynamic as ours -- which means it
should be about 1 percent of GDP. This growth package must be built on
broad-based tax relief that will directly affect economic growth -- and not
the kind of spending projects that would have little immediate impact on
our economy. This growth package must be temporary and take effect right
away -- so we can get help to our economy when it needs it most. And this
growth package must not include any tax increases.
Specifically, this growth package should bolster both business investment
and consumer spending, which are critical to economic growth. And this
would require two key provisions: To be effective, a growth package must
include tax incentives for American businesses, including small businesses,
to make major investments in their enterprises this year. Giving them an
incentive to invest now will encourage business owners to expand their
operations, create new jobs, and inject new energy into our economy in the
process.
To be effective, a growth package must also include direct and rapid income
tax relief for the American people. Americans could use this money as they
see fit -- to help meet their monthly bills, cover higher costs at the gas
pump, or pay for other basic necessities. Letting Americans keep more of
their own money should increase consumer spending, and lift our economy at
a time when people otherwise might spend less.
Yesterday, I spoke to members of the congressional leadership from both
political parties. They shared with me their thoughts on the best way
forward. And I was encouraged by those discussions and I believe there is
enough broad consensus that we can come up with a package that can be
approved with bipartisan support. I've asked Treasury Secretary Hank
Paulson to lead my administration's efforts to forge an agreement with
Congress, so that we can deliver this needed boost to our economy as
quickly as possible.
Passing a new growth package is our most pressing economic priority. When
that is done, Congress must turn to the most important economic priority
for our country, and that's making sure the tax relief that is now in place
is not taken away. A source of uncertainty in our economy is that this tax
relief is set to expire at the end of 2010. Unless Congress acts, the
American people will face massive tax increases in less than three years.
The marriage penalty will make a comeback; the child tax credit will be cut
in half; the death tax will come back to life; and tax rates will go up on
regular income, capital gains, and dividends. This tax increase would put
jobs and economic growth at risk, and Congress has a responsibility to keep
that from happening. So it's critical that Congress make this tax relief
permanent.
We're in the midst of a challenging period, and I know Americans are
concerned about our economic future. But our economy has seen challenging
times before -- and it is resilient.
In a vibrant economy, markets rise and decline. We cannot change that
fundamental dynamic. As a matter of fact, eliminating risk altogether
would also eliminate the innovation and productivity that drives the
creation of jobs and wealth in America. Yet there are also times when
swift and temporary actions can help ensure that inevitable market
adjustments do not undermine the health of the broader economy. This is
such a moment.
By passing an effective growth package quickly, we can provide a shot in
the arm to keep a fundamentally strong economy healthy. And it will help
keep economic sectors that are going through adjustments, such as the
housing market, from adversely affecting other parts of our economy.
I'm optimistic about our economic future, because Americans have shown time
and again that they are the most industrious, creative, and enterprising
people in the world. That is what has made our economy strong. That is
what will make it stronger in the challenging times ahead.
Thank you.
END 11:38 A.M. EST | 
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