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 Home > News & Policies > August 2005

For Immediate Release
Office of the Press Secretary
August 9, 2005

President Meets with Economic Team
Bush Ranch
Crawford, Texas

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     Fact sheet In Focus: Economy

12:00 P.M. CDT

THE PRESIDENT: Thank you all for coming. As you can see, my economic team has come to Crawford, and we've just finished a very interesting discussion about our economy and what we need to do to make sure economic growth remains strong. After this press conference, we'll go over to the house and have a lunch and give us a chance to continue our dialogue.

President George W. Bush stands with his economic advisors as he addresses a news conference, Tuesday, Aug. 9, 2005 at the Bush Ranch in Crawford, Texas, following a meeting to discuss the strength of the U.S. economy. From left to right are Dr. Ben Bernanke, chairman of the Council of Economic Advisers; U.S. Trade Representative Rob Portman; U.S. Secretary of Labor Elaine Chao; U.S. Secretary of Agriculture Mike Johanns; U.S. Treasury Secretary John Snow; U.S. Commerce Secretary Carlos Gutierrez; OMB Director Josh Bolten and assistant to the President on economic policy, Allan B. Hubbard. White House photo by Paul Morse But before I begin in my discussion about the economy, I do want to congratulate the Discovery crew. Commander Collins and the pilot of that crew, James Kelly, did a fantastic job of bringing the craft, and most importantly, the folks aboard the craft home safely to California this morning. It was a great achievement. It's an important step for NASA to -- as it regains the confidence of the American people and begins the transition to the new mission we set out for NASA. So, congratulations, Commander Collins. It's quite an achievement.

The economy of the United States is strong, and the foundation for sustained growth is in place. The economic agenda is based on the fundamental trust that the American people make good decisions for themselves and for their families. And that's why my policies allow more Americans to keep more of what they earn, to have more control over their daily lives from health care to education to their retirement. It makes sense to trust people with their own money.

I'm pleased to report that the strategy is working. The economy is growing faster than any other major industrialized country. Job growth is strong. We added over 200,000 new jobs in July. This country has added nearly 4 million new jobs since May of 2003. The unemployment rate is 5 percent, which is below the average of the 1970s, 1980s, and 1990s. Americans have more money in their pocket, and that's good news.

There's still some challenges to the economy, and it's important for the American people to know we understand there are challenges and we're acting to meet them. First of all, we have a challenge when it comes to energy. Yesterday in New Mexico, I signed an energy bill. I'll repeat today what I said yesterday, and that is, this bill isn't going to lower people's gasoline prices overnight, but it is -- the bill does lay out a strategy to help us conserve more, produce more in environmentally friendly ways, to use renewable sources of energy, all aimed at protecting our economic security and national security. The more we diversify our -- the energy sector, the less dependent we are on foreign sources of energy.

President George W. Bush addresses a news conference, Tuesday, Aug. 9, 2005 at the Bush Ranch in Crawford, Texas, following a meeting to discuss the strength of the U.S. economy. At left are economic policy advisors U.S. Trade Representative Rob Portman; U.S. Secretary of Labor Elaine Chao and U.S. Secretary of Agriculture Mike Johanns.  White House photo by Paul Morse Secondly, we're opening up new markets. In order to keep this economy growing, we've got to make sure we have not only free trade, but fair trade. The CAFTA vote is an important vote because it opened up new markets for 44 million consumers. That's going to be good for our farmers and entrepreneurs and small business people. We discussed the need to continue advancing free and fair trade at the -- during the Doha Round discussions that will be held in Hong Kong later this -- later this year.

In order to make sure the economy continues to grow, we've got to continue to work with Congress to reduce our deficit. The federal deficit is projected to be $94 billion less than previously expected, and that's thanks to a combination of tax relief, which got our economy growing, and spending restraint. We're ahead of pace to cut the deficit in half by 2009. And it's very important for Congress, as they work on the appropriations bills, to adhere to the budgets that they passed so that -- so that we can continue to send the signals to people around the country that we're serious about being fiscally responsible with the people's money.

We need to have certainty in the tax code. That's why I strongly believe that the tax relief we passed must be permanent, the death tax repealed forever. And at the same time, I look forward to working with the Tax Reform Commission to develop a simpler code that's a fairer code and one that encourages economic growth.

In order to make sure this economy continues to grow, we got to do something about the lawsuits that are making it difficult for our entrepreneurs and small business people. I had the honor of signing a class action reform. Congress needs to pass asbestos reform, as well as medical liability reform.

Medical liability reform will help make health care costs more affordable and health care more accessible for our folks. And that leads me to our understanding that rising health care costs are a potential burden on economic growth, and certainly a burden on many of our families. One way to deal with the costs is to do something about the frivolous lawsuits that are running up the cost of medicine.

I signed a patient's safety bill which will help reduce costs and, as importantly, medical errors. The Congress should pass association health plans so that small businesses can pool risk and expand health savings accounts at the same time. In other words, association health plans will help small businesses; health savings accounts will help individual consumers, help our families, but help small businesses, as well, better afford health care.

President George W. Bush addresses a news conference, Tuesday, Aug. 9, 2005 at the Bush Ranch in Crawford, Texas, following a meeting to discuss the strength of the U.S. economy. White House photo by Eric Draper And finally on Social Security, look, we -- in order to make sure this economy continues to grow, we have got to deal with problems now, to solve problems now before they place an undue restraint on our families and an undue restraint on the ability to grow our economy. And Social Security is a -- is a liability that -- it needs to be addressed now.

Now, senior citizens must understand when I talk about Social Security reform that nothing will change for you, you'll get your check. But your grandchildren and your children are paying payroll taxes in a system that will be broke by 2041. And it's time to fix the system. Congress needs to understand the gravity of the situation. We have a serious problem. And I believe good leaders are those who stand up and address problems and not pass them on and hope that somebody else will come up and solve the problem.

Part of the solution for Social Security is to make sure that the poor do not retire into poverty, to make sure that people get benefits that grow at least with the rate of inflation -- that will be the wealthier citizens get benefits growing at the rate of the cost of living -- but poorer citizens should have their benefits go up by wage increases. And that reform alone will fix a lot of the solvency issue of Social Security.

And while we're fixing Social Security, I strongly believe younger workers ought to be allowed -- given the chance to, given the opportunity to take some of their own money and set it aside in a personal savings account. And that will have two effects. One, it will increase savings throughout our society, which is important to economic growth and vitality. But more importantly, it will mean workers from all walks of life will be able to own an asset that they call their own and that the government cannot take away.

And so we've had a wide-ranging discussion on these important problems and opportunities. We're confident about the future of the American economy because we're confident that the entrepreneurial spirit is strong here.

With that, I'll be glad to take a couple of questions from you. Yes, ma'am. That would be you, Deb.

Q Mr. President, on Iran. Iran is thumbing its nose at the United States and Europe by resuming their uranium conversion activities. So if Iran doesn't blink, what is the -- does the United States want to see immediate referral to the Security Council and -- for punitive sanctions? And if so, what should those sanctions look like?

THE PRESIDENT: I appreciate that question. First of all, as you know, we have made strong steps -- we've condemned strongly Iranians' attempt to develop any kind of program that would allow them to enrich uranium to develop a weapon. In other words, the Iranians said they were in compliance with certain international rules, and yet we found out they weren't in compliance of those rules. And so we're very deeply suspicious of their desires, and called upon our friends in Europe, what's called the EU 3 -- Germany, France and Great Britain -- to lead the diplomatic efforts to convince the Iranians to give up their nuclear ambitions.

First of all, I want to applaud the EU 3 for being strong in their -- in presenting a unified voice. Secondly, in terms of consequences if the Iranians continue to balk, we'll work with the EU 3. In other words, they're the -- they're the lead negotiators on behalf of the free world, and we will work with them in terms of what consequences there may be. And certainly, the United Nations is a potential consequence.

And I -- just as I was walking in here, I received word that the new Iranian President said he was willing to get back to the table. Now, I don't want to put words in his mouth, and you're going to have to check that out before you print that in your story, but if he did say that, I think that's a positive sign that the Iranians are getting a message that it's not just the United States that's worried about their nuclear programs, but the Europeans are serious in calling the Iranians to account and negotiating. I don't know if you've got that word, or not. That's a positive development.

But we'll work with our friends on steps forward, on ways to deal with the Iranians if they so choose to ignore the demands of the world. It is important for the Iranians to understand that America stands squarely with the EU 3, that we feel strongly the Iranians need to adhere to the agreements made in the Paris Accord, and that we will be willing to work with our partners on -- in dealing with appropriate consequences should they ignore the demands.

Q It sounds as if you're willing to give them more time to let this work out --

THE PRESIDENT: Well, the man said he wanted to negotiate, and, of course -- again, we're working with the EU 3. They're the lead negotiators. In other words, our strategy has been all along to make -- to work with Germany, France and Great Britain, in terms of sending a strong signal and message to Iran. And today it looked like that the new Iranian leader has heard that message. We'll have to watch very carefully, however, because, as I repeat, they have, in the past, said they would adhere to international norm, and then were caught enriching uranium. And that's -- that's dangerous. We don't want the Iranians to have a nuclear weapon.

The positive news, Deb, is, is that the world, at least the people we deal with -- the Europeans, for example -- are very -- were knitted up in terms of the goal, and that is to prevent the Iranians from having a nuclear weapon.

Patsy.

Q Thank you, Mr. President. You just said you were deeply suspicious of Iran's desires. Then, my question is, why does the United States support a civilian nuclear program for Iran, but not for North Korea?

THE PRESIDENT: Yes. The Iranians have expressed a desire to have a civilian nuclear program, and we've said that it is the -- it makes sense only so long as the plant is under strong international inspection regimes and the uranium used to run the power plant is provided by a country with whom we're comfortable -- with which we're comfortable, and the spent fuel is collected. In other words, there will be a strong regime -- I talked about this at the National Defense University speech, about how we can enhance the spread of nuclear power, but in a peaceful way that will assure countries that spent fuel will not be enriched for bomb-making capacities.

Secondly, the Iranians have been, we hope, straightforward in their willingness to accept this kind of international cooperation.

North Korea is in a different situation. The North Koreans have -- didn't tell the truth when it came to their enrichment programs. But what's different about it is the South Koreans have offered power. In other words, the South Koreans have said, we'll build and share power with you, which seems to me to make a good -- good sense, so long as the North Koreans give up their nuclear weapons, so long as there's full transparency, so long as there's the ability for the international community to know exactly what's going on in a potential weapons program.

The strategy is the same, by the way, in terms of dealing diplomatically with both countries. As I mentioned, the EU 3 is taking the lead -- we have a little different strategy, obviously, different players with North Korea, but nevertheless, it's the same concept: A group of nations are negotiating on behalf of the free world to let, in this case, Kim Jong-il understand that we're united in our desire to -- for you to give up any ambitions to develop a nuclear weapon, and united in our desire, by the way, to prevent you from proliferating.

Bill Roberts. This will be the last question.

Q Thank you, Mr. President. Americans have grown accustomed to historically low interest rates over the last few years. How concerned are you and your economic advisors that, as interest rates rise now, that could slow the momentum in the U.S. economy?

THE PRESIDENT: I think -- first of all, as you know, that the Federal Reserve is completely independent from the White House. They make decisions independent of politics, and that's important. Ben used to serve on the Federal Reserve Board, so he's -- he has had some insight into the workings of the Federal Reserve, but our job is to deal with fiscal policy, and the Federal Reserve deals with monetary policy.

And as I've said all along, I trust the judgment of Chairman Alan Greenspan. He is -- he makes decisions based upon facts, not based upon politics. And I think it's important for the American people to understand that.

In terms of whether interest rates will -- the effect interest rates will have on our economy, I think we're more concerned about energy prices and health care prices. Those are the two areas that we see as having a greater effect on potential economic -- on the growth, on the future of economic growth. And that's why the energy bill is an important start, and that's why we've laid out initiatives that we think will help American families deal with the -- and small businesses deal with the rising cost of health care.

Listen, thank you all. Great to see you. Mark, good to see you, sir. Thank you.

END 12:17 P.M. CDT