Bush sees no quick fix for sagging economy

Raps Congress for inaction on stimulus bills

Reporters questioned President Bush about the struggling economy yesterday in the White House Rose Garden. (Charles Dharapak/associated press)

WASHINGTON - With consumer confidence falling and gasoline and food prices at record highs, President Bush delivered an unusually dark assessment of the economy yesterday, saying the nation is in "very difficult times, very difficult."

There are no quick fixes, Bush said, to ease the pain that Americans feel.

Bush used a Rose Garden news conference to go on the offensive against the Democratic-controlled Congress, accusing lawmakers of dragging their feet on bills that would address pocketbook issues.

Democrats pushed back, accusing Bush of trotting out old ideas and of favoring oil companies at the expense of average Americans.

The sharp exchanges struck a different tone than one this year when the two parties joined forces on an economic stimulus package, including tax rebates that are beginning to go out. In the months since then, the president and Congress have been unable to agree on measures to address the economic troubles, and by yesterday they were mostly blaming each other.

"If there was a magic wand to wave, I'd be waving it, of course," Bush said, referring specifically to gasoline prices, which have climbed $1.40 a gallon in 18 months. "But there is no magic wand to wave right now. It took us a while to get to this fix."

Instead of embracing new proposals, Bush mainly dusted off old ones. He called on Congress to address the cost of energy by opening the Arctic National Wildlife Refuge to drilling for petroleum and by expanding nuclear power, two plans that have long been legislatively shelved.

Bush also said, "Those who worry about recession, slowdown, whatever you want to call it" ought to make his tax cuts permanent.

Bush was cool to proposals by Senator John McCain, the presumptive presidential Republican nominee, and Senator Hillary Clinton, a Democratic presidential contender, to give drivers a break by temporarily suspending the 18.4-cents-a-gallon federal tax on gasoline.

The other Democratic contender, Senator Barack Obama, yesterday dismissed the suspension of the gas tax as a gimmick.

Bush similarly rejected an idea by a fellow Texas Republican, Senator Kay Bailey Hutchison, to stop making deposits in the Strategic Petroleum Reserve. "If I thought it would affect the price of oil positively," he said, "I would seriously consider it."

Bush has spent much of his presidency riding high on claims of unparalleled job growth, but with nine months left in office, he has to confront a new reality. In recent weeks, he has said the economy is in a "rough patch."

This month, he expressed optimism, saying, "I'm confident we're going to come out of it."

But his tone yesterday was more somber, reflecting a new report that found consumer confidence plummeting as home prices have collapsed more rapidly than at any time in 20 years.

"I will tell you that these are very difficult times, very difficult," he said while continuing to avoid the word "recession." "And we'll let the economists define it for what it is."

Americans, Bush said, are "looking to their elected leaders in Congress for action."

"Unfortunately," he added, "on many of these issues all they're getting is delay."

Democrats responded with a news conference in which Senator Charles E. Schumer, Democrat of New York, said: "He says he's concerned with high gas prices and high food prices and student and home loan problems. But the truth is that the president has closed his eyes and put his hands over his ears as these crises have grown."

Schumer and other Democrats, including Senator Byron L. Dorgan of North Dakota, urged the administration to stop filling the Strategic Petroleum Reserve temporarily and work to hold down speculative trading in oil futures.

"Why not deal with the unbelievable orgy of speculation that's occurring in these futures markets?" Dorgan asked. "That's what's driving up prices."

Bush attributed high prices to the lack of refining capacity, and argued that opening up the arctic refuge - a proposal long opposed by Democrats and environmentalists - would enable the United States to produce a million additional barrels of oil every day. He called it an "intermediate-term" solution to the gasoline price problem, saying, "It sends a signal to markets that the United States is not going to restrict exploration."

On housing, Bush called on lawmakers to pass two measures that have long been in the works - one to overhaul the Federal Housing Administration and another to revamp the government-sponsored mortgage lenders, Fannie Mae and Freddie Mac. But he did not address a proposal being drafted by House Democrats to broadly expand the availability of federally insured mortgages.

Bush also said Democrats are "considering a massive, bloated farm bill" that fails to eliminate subsidy payments to farmers at a time when food prices are skyrocketing and the farm economy is thriving.

When Democrats won control of Congress in November 2006, Bush immediately vowed to work with them. But their cooperation has been limited at best, and with the presidential campaign now in full swing, it will be difficult for them to agree on all but the most noncontroversial matters.

At their own news conference, Senate Republicans blamed congressional Democrats for blocking efforts to boost domestic oil production off the shores of states such as Virginia and in Alaska.