- The Washington Times - Wednesday, March 19, 2008

President Bush yesterday said that despite his warnings against too much federal intervention in the economy, the government might take more steps to avert economic collapse if events warrant it.

“If there needs to be further action, we’ll take it, in a way that does not damage the long-term health of our economy,” Mr. Bush said during a speech in Jacksonville, Fla.

The Federal Reserve yesterday cut a key interest rate, the federal funding rate, by three-quarters of a point, the latest move by the independent central bank to prop up the economy.

The president’s promise to do more if necessary served as a clarification of his remarks last week in New York.

Mr. Bush said then that the government can act to help some Americans avoid home foreclosures but should not do too much. The housing market, in particular, he said, needs some time to self-correct.

Democrats criticized that position, saying it amounted to inaction.

Some called JPMorgan Chase’s Fed-backed buyout of investment bank Bear Stearns a government bailout for big business.

Mr. Bush, speaking to dockworkers at the Blount Island Marine Terminal, said that in the Bear Stearns deal “the Federal Reserve and the Treasury acted swiftly to promote stability in our financial markets at a crucial time.”

House Speaker Nancy Pelosi, California Democrat, also commended the Fed’s move but criticized the president.

“While the Fed is aggressively working to stabilize the financial markets, the president said he would wait to see ‘if there needs to be further action,’ ” she said. “Democrats believe that the time is now to build on the Fed’s efforts, by taking action to ease the economic burdens facing everyday Americans, especially those threatened by foreclosure, unemployment and rising energy and health care costs.”

Mr. Bush has resisted calls for a second stimulus package to follow up on the $157 billion deal passed last month that will deliver checks of between $300 and $1,200 to low- and middle-income workers, and gives tax breaks on investment to businesses.

The president has said the government needs to allow time for the first stimulus to work. Yesterday, he offered reassurances that the crisis will pass.

“I understand there’s short-term difficulty, but I want people to understand that in the long term, we’re going to be just fine. People are going to still be able to work,” he said.

The president’s speech originally was aimed primarily at the issue of free trade, and Mr. Bush again made the case for an agreement with Colombia.

The Colombia free-trade agreement, Mr. Bush said, “has even greater economic potential, because Colombia has a larger [gross domestic product], and even greater national security importance, because of Colombia’s strategic location.”

Top congressional Democrats have said they will not pass another trade agreement until after an extensive overhaul of Trade Adjustment Assistance, the program that helps those who have lost jobs as a result of free trade.

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