boston.com Business your connection to The Boston Globe

Bush vows to cut deficit

Move called part of push to bolster the sagging dollar

WASHINGTON -- President Bush pledged yesterday to work with Congress to reduce the government's huge budget deficit as a key step in assuring the world that his administration supports a strong dollar.

"We'll do everything we can in the upcoming legislative session to send a signal to the markets that we'll deal with our deficit, which, hopefully, will cause people to want to buy dollars," Bush told reporters.

Bush's comments came following a meeting at the White House with Italian Prime Minister Silvio Berlusconi, who had raised the issue of the dollar's plunge against the euro, the currency of Italy and 10 other European nations.

"The policy of my government is a strong-dollar policy," Bush said during a news conference following the Oval Office meeting, echoing statements he and Treasury Secretary John Snow have made times over the past three years as the dollar's value has fallen sharply against many major currencies.

Financial markets, which for the most part ignored the president's comments, believe the administration, while publicly supporting a strong dollar, secretly wants the greenback to fall further as a way of dealing with America's record trade deficits.

Bush's comments on the dollar came one day after the government reported that the US trade deficit hit a monthly record of $55.5 billion in October.

Berlusconi did not elaborate on what concerns he raised about the dollar's decline but Europeans are concerned that the falling dollar will jeopardize Europe's economic recovery because it will cut into sales by European manufacturers.

SEARCH THE ARCHIVES
 
Today (free)
Yesterday (free)
Past 30 days
Last 12 months
 Advanced search / Historic Archives