WASHINGTON, July 13: US President George W. Bush on Friday vowed to protect a US economic recovery that is “beginning to show some strength” by taking strong action against corporate abuses that have battered markets.
Unemployment numbers are steady, our consumer spending numbers are up, our manufacturing orders are increasing — in other words the recovery is beginning to show some strength, the president declared.
His comments came in a roundtable with Polish reporters, who asked what he would tell Polish President Aleksander Kwasniewski — due here July 17-18 for a state visit here — to allay his concerns about the US economy.
We’re making some progress, we’ve got to do more, but I’m pleased to report to him that I think things are going to get better the foundation for long-term growth is in place, said the US leader.
Asked about worries that the US administration is doing too little to combat corporate wrondgoing in the wake of an avalanche of scandals, Bush replied: I’ll explain to him (Kwasniewski) we are doing things.
Explaining that “there’s not much difference” between his proposals and House or Represenatives and Senate measures, Bush promised: a bill will come out that will hold people accountable for accounting fraud.
The US president also emphasized that frayed confidence in corporate actors was just one factor affecting the US economy, which must also contend with fears and expenses tied to the “war on terrorism” as well as price-to-earnings ratios that of late have been very high.
The Bush administration said on Friday it expected the federal government to post a deficit of $165 billion this fiscal year, a 56 percent increase over earlier projections reflecting a dramatic drop in tax revenues as the stock market has slumped.
Conceding it was caught off guard by the steepest decline in receipts since 1955, the administration said it may develop new budgetary models aimed at projecting the impact of stock movements on capital gains and other tax revenues.
We have no model at this time, and it will be very difficult, I know, to produce one, but we need to try to understand this phenomenon better, White House budget director Mitch Daniels said.
While the White House revised upward its 2002 economic growth forecast to 2.6 per cent from 0.7 per cent and projected a return to surpluses in fiscal 2005, rising deficits in the near term could hurt President George W. Bush and his fellow Republicans in upcoming elections, where small swings could shift control of both the House of Representatives and Senate.—AFP/Reuters