[Congressional Record (Bound Edition), Volume 152 (2006), Part 1]
[Senate]
[Pages 1514-1515]
[From the U.S. Government Publishing Office, www.gpo.gov]




 ECONOMIC REPORT OF THE PRESIDENT DATED FEBRUARY 2006 WITH THE ANNUAL 
       REPORT OF THE COUNCIL OF ECONOMIC ADVISERS FOR 2006--PM 39

  The PRESIDING OFFICER laid before the Senate the following message 
from the President of the United States, together with an accompanying 
report; which was referred to the Joint Economic Committee:

To the Congress of the United States:
  The United States economy continues to demonstrate remarkable 
resilience, flexibility, and growth. Having previously endured a stock 
market collapse, recession, terrorist attacks, and corporate scandals, 
this year the economy showed strong growth and robust job creation in 
the face of higher energy prices and devastating natural disasters. 
This is the result of the hard work of America's workers, supported by 
pro-growth tax policies.
  In 2005, the Nation's real gross domestic product (GDP) grew 3.5 
percent for the year, above the historical average. About 2 million 
payroll jobs were added in 2005, and the unemployment rate dropped to 
4.7 percent last month, well below the averages of the 1970s, 1980s, 
and 1990s. Real disposable personal income increased, and real 
household net worth reached an all-time high. This growth comes on top 
of an already strong expansion. More than 4.7 million payroll jobs have 
been added since August 2003.
  Compared with the performance of other nations' economies, our 
economic growth is especially impressive. The United States has added 
more jobs in the past two-and-a-half years than Japan and the European 
Union combined. Real GDP growth in the United States has been faster 
than in any other major industrialized country since 2001, and America 
is forecasted to continue as the fastest-growing country over the next 
two years.
  Our economy's fundamental strength comes from the ingenuity and hard 
work of our workers. Productivity--how much workers produce per hour-- 
has accelerated since 2000. In the past five years, productivity has 
grown faster than in any other five-year period since the mid-1960s. 
The productivity of the United States is increasing faster than any 
other major industrialized country.
  Productivity growth raises our standard of living and plays a central 
role in our competitiveness in the worldwide economy. Productivity 
growth will be even more important as new technologies accelerate 
global economic integration and as the American population ages.
  We must now build on this fundamental strength by making robust 
investments in physical sciences, improving private incentives for 
research and development, and boosting math and science education and 
worker training. The American Competitiveness Initiative will help us 
remain a world leader in science and technology, which means good high-
paying jobs for the American people.
  We must also continue to pursue pro-growth economic policies and 
foster a culture of entrepreneurship. To adopt innovations effectively, 
our companies and workers need the incentives and flexibility that 
support a thriving free-market economy.
  Maintaining a low tax burden is essential for our economic growth and 
competitiveness. Tax relief has helped our economy, and raising taxes 
will increase the burden on our families and small businesses. To keep 
our economy growing, Congress needs to make the tax relief permanent.
  Two years ago, I called for cutting the budget deficit in half by 
2009 by restraining spending and spurring economic growth. Every year 
of my presidency, we have reduced the growth of non-security 
discretionary spending, and last year Congress passed bills that cut 
this spending. This year, my budget will cut it again, and it will 
reduce or eliminate more than 140 programs that are performing poorly 
or not fulfilling essential priorities. By passing these reforms, we 
will save the American taxpayer another $14 billion next year, and we 
will stay on track to cut the deficit in half by 2009.
  Controlling discretionary spending alone is not enough, however. We 
have recently passed significant savings in mandatory spending 
programs. We need to do more because the only way to solve our Nation's 
fiscal challenges is to address the explosions in growth of entitlement 
programs like Social Security, Medicare, and Medicaid. I have called 
for a bipartisan commission to examine the full impact of the Baby Boom 
retirement and help us come up with bipartisan answers. The longer 
Congress waits to act, the more difficult the choices will become.
  Working together, we accomplished other significant pro-growth 
reforms that will help our Nation's economy grow stronger and create 
more jobs. More remains to be done.
  Growth in spending on health care has been more rapid than general 
inflation, straining consumers, employers, and government budgets. Two 
years ago, we created Health Savings Accounts (HSAs) to help give 
patients more control over their health care decisions and to make 
health care more available and affordable. This year, I am proposing to 
enhance HSAs to make them more widely available, valuable to consumers, 
and attractive to small businesses--and to make it easier for people to 
keep their insurance policies when they change jobs. Last year, we 
worked with Congress to pass a patient safety bill that will help 
reduce medical errors. Getting doctors and patients the information 
they need on the quality, cost, and effectiveness of different 
treatments will help Americans get the highest quality and highest 
value care. This year, my Administration will push to make more 
information about price and quality available to consumers, and move 
forward on these and other policies to lower the cost of health care.
  Our Nation's liability laws allow too many frivolous lawsuits and 
raise costs for consumers and businesses. A year ago, we worked with 
Congress to pass bipartisan class action reform to help curb lawsuit 
abuse. I urge Congress in the coming year to pass other essential legal 
reforms, including asbestos and medical liability reforms.
  Energy prices have risen in the last year, but the underlying causes 
of high prices are long-standing. Last year, we passed the first major 
energy bill in over a decade. It encourages new technologies and 
updates government regulations. Over time, the new law will help 
increase the reliability of our energy supply and the efficient use of 
the energy we have. We must continue to find new ways to diversify our 
sources of energy. I have proposed the Advanced Energy Initiative to 
help increase research in alternative energy sources and technology and 
to make America less dependent on foreign sources of energy.
  Because 95 percent of the world's customers live outside of our 
borders,

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opening international markets to our goods and services is critical for 
our economy. My Administration will continue to work tirelessly to open 
markets and knock down barriers to free and fair trade so that American 
farmers and workers can compete on a level playing field worldwide.
  These and other issues are discussed in the 2006 Annual Report of the 
Council of Economic Advisers. This report is prepared by CEA to help 
policymakers understand the economic context of a variety of issues and 
trends as our Government makes decisions regarding our economic future. 
By adopting sound economic policies that build on our strengths, we 
will keep our economy moving forward and extend prosperity for all 
Americans.
                                                      George W. Bush.  
The White House, February 2006.

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