Monday, December 5, 2005

President Bush yesterday renewed his call for Congress to make his tax cuts permanent, which he said would sustain an economic expansion that largely has gone unsung by the White House.

“This economy of ours is on the move,” he told workers in a North Carolina manufacturing plant. “Thanks to tax relief and spending restraint and pro-growth economic policies, this economy is strong, businesses are booming, and the people in this country are working.”

The speech was aimed at reversing public skepticism of the economy and giving the White House credit for significant job growth. Last week, Allan B. Hubbard, director of the president’s National Economic Council, acknowledged he had “not been doing a good job” of talking up the economy.

The president also used yesterday’s speech as an opportunity to call on business owners to honor their pension commitments to employees.

“My message to corporate America is: ‘You need to fulfill your promises,’” he said. “When you say to a worker this is what they’re going get when they retire, you better put enough money in the account to make sure the worker gets … what you said.”

Mr. Bush warned that any legislation on pensions should strengthen worker guarantees.

“Congress needs to straighten up these rules,” he said. “I’m not going to sign a bill that weakens pension funding for the American workers.”

Although Mr. Bush touted strong job growth, record home-ownership rates and robust business activity, Mr. Hubbard acknowledged there are weak spots in the economy. For example, U.S. auto giants General Motors Corp. and Ford Motor Co. are struggling.

“GM has some big challenges right now, primarily because they make automobiles that are less fuel-efficient,” Mr. Hubbard said. “And with higher energy prices, the American people are interested in more fuel-efficient cars.

“It’s unfortunate that General Motors is going to have to be laying off at the same time Toyota and other companies are expanding in the U.S.,” he added.

Still, Mr. Hubbard said GM and Ford do not need the sort of governmental assistance that allowed Chrysler Corp. to restructure in 1979.

“They don’t need a bailout,” said Mr. Hubbard, who was with Mr. Bush in North Carolina. “All they need is the time to restructure, and we’re confident they’ll be very successful.”

Mr. Hubbard added: “They’ve been very important companies over the past century, and we’re confident they’ll continue to be very important and very successful companies.”

Mr. Bush criticized “pessimists” in the Democratic Party who predicted that his first-term tax cuts would harm the economy. He cautioned that any rollback of the cuts would amount to a significant tax increase.

“The tax relief that we delivered is set to expire in a couple of years,” he said. “In other words, it’s not permanent — it can go away. And unless Congress acts, you’re going to get a big tax hike when that happens.”

In Washington, Senate Minority Leader Harry Reid, Nevada Democrat, railed against the president’s economic policies.

“It is his runaway budget and trade deficits, billions spent on tax giveaways, backwards-looking energy plan designed by and for special interests, and inaction during this country’s health care crisis that have created a myriad of problems for our children’s generation,” Mr. Reid said.

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