    [Public Papers of the Presidents of the United States: George W. Bush (2005, Book II)]
    [August 9, 2005]
    [Pages 1316-1320]
    [From the U.S. Government Publishing Office www.gpo.gov]

     The President's News Conference in Crawford, Texas
     August 9, 2005

        The President. Thank you all for coming. As you can see, my economic
    team has come to Crawford, and we've just finished a very interesting
    discussion about our economy and what we need to do to make sure
    economic growth remains strong. After this press conference, we'll go
    over to the house and have a lunch and give us a chance to continue our
    dialog.
        But before I begin in my discussion about the economy, I do want to
    congratulate the Discovery crew. Commander Collins and the pilot of that crew, James Kelly, did a fantastic job of bringing the craft, and most
    importantly the folks aboard the craft, home safely to California this
    morning. It was a great achievement. It's an important step for NASA
    to--as it regains the confidence of the American people and begins to
    transition to the new mission we set out for NASA. So, congratulations,
    Commander Collins. It's quite an achievement.
        The economy of the United States is strong, and the foundation for
    sustained growth is in place. The economic agenda is based on the
    fundamental trust that the American people make good decisions for
    themselves and for their families. And that's why my policies allow more
    Americans to keep more of what they earn, to have more control over
    their daily lives, from health care to education to their retirement. It
    makes sense to trust people with their own money.

        I'm pleased to report that the strategy is working. The economy is
    growing faster than any other major industrialized country. Job growth
    is strong. We added over 200,000 new jobs in July. This country has
    added nearly 4 million new jobs since May of 2003. The unemployment rate
    is 5 percent, which is below the average of the 1970s, 1980s, and 1990s.
    Americans have more money in their pocket, and that's good news.

        There's still some challenges to the economy, and it's important for
    the American people to know we understand there are challenges, and
    we're acting to meet them. First of all, we have a challenge when it
    comes to energy. Yesterday in New Mexico, I signed an energy bill. I'll
    repeat today what I said yesterday, and that is, this bill isn't going
    to lower people's gasoline prices overnight, but it is--the bill does
    lay out a strategy to help us conserve more, to produce more in
    environmentally friendly ways, to use renewable sources of energy,

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    all aimed at protecting our economic security and national security. The
    more we diversify our--the energy sector, the less dependent we are on
    foreign sources of energy.
        Secondly, we're opening up new markets. In order to keep this
    economy growing, we've got to make sure we have not only free trade, but
    fair trade. The CAFTA vote is an important vote because it opened up new
    markets for 44 million consumers. That's going to be good for our
    farmers and entrepreneurs and small-business people. We discussed the
    need to continue advancing free and fair trade at the--during the Doha
    round discussions that will be held in Hong Kong later this year.
        In order to make sure the economy continues to grow, we've got to
    continue to work with Congress to reduce our deficit. The Federal
    deficit is projected to be $94 billion less than previously expected,
    and that's thanks to a combination of tax relief, which got our economy
    growing, and spending restraint. We're ahead of pace to cut the deficit
    in half by 2009. And it's very important for Congress, as they work on
    the appropriations bills, to adhere to the budgets that they passed so
    that we can continue to send the signals to people around the country
    that we're serious about being fiscally responsible with the people's
    money.
        We need to have certainty in the Tax Code. That's why I strongly
    believe that the tax relief we passed must be permanent, the death tax
    repealed forever. And at the same time, I look forward to working with
    the Tax Reform Commission to develop a simpler code that's a fairer code
    and one that encourages economic growth.
        In order to make sure this economy continues to grow, we got to do
    something about the lawsuits that are making it difficult for our
    entrepreneurs and small-business people. I had the honor of signing a
    class-action reform. Congress needs to pass asbestos reform as well as
    medical liability reform.
        Medical liability reform will help make health care costs more
    affordable and health care more accessible for our folks. And that leads
    me to our understanding that rising health care costs are a potential
    burden on economic growth and certainly a burden on many of our
    families. One way to deal with the costs is to do something about the
    frivolous lawsuits that are running up the cost of medicine.
        I signed a patient's safety bill which will help reduce costs and,
    as importantly, medical errors. The Congress should pass association
    health plans so that small businesses can pool risk and expand health
    savings accounts at the same time. In other words, association health
    plans will help small businesses; health savings accounts will help
    individual consumers, help our families, but help small businesses, as
    well, better afford health care.
        And finally on Social Security, look, we--in order to make sure this
    economy continues to grow, we have got to deal with problems now, to
    solve problems now, before they place an undue restraint on our families
    and an undue restraint on the ability to grow our economy. And Social
    Security is a--is a liability that--it needs to be addressed now.
        Now, senior citizens must understand when I talk about Social
    Security reform that nothing will change for you. You'll get your check.
    But your grandchildren and your children are paying payroll taxes in the
    system that will be broke by 2041. And it's time to fix the system.
    Congress needs to understand the gravity of the situation. We have a
    serious problem. And I believe good leaders are those who stand up and
    address problems and not pass them on and hope that somebody else will
    come up and solve the problem.
        Part of the solution for Social Security is to make sure that the
    poor do not retire into poverty, to make sure that people get benefits
    that grow at least with the rate of inflation--that will be, the
    wealthier citizens get benefits growing at the rate of

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    the cost of living, but poorer citizens should have their benefits go up
    by wage increases. And that reform alone will fix a lot of the solvency
    issue of Social Security.
        And while we're fixing Social Security, I strongly believe younger
    workers ought to be allowed--given the chance to, given the opportunity
    to take some of their own money and set it aside in a personal savings
    account. And that will have two effects. One, it will increase savings
    throughout our society, which is important to economic growth and
    vitality. But more importantly, it will mean workers from all walks of
    life will be able to own an asset that they call their own and that the
    Government cannot take away.
        And so we've had a wide-ranging discussion on these important
    problems and opportunities. We're confident about the future of the
    American economy because we're confident that the entrepreneurial spirit
    is strong here.
        With that, I'll be glad to take a couple of questions from you. Yes,
    ma'am. That would be you, Deb [Deb Riechmann, Associated Press].

    Iran

        Q. Mr. President, on Iran, Iran is thumbing its nose at the United
    States and Europe by resuming their uranium conversion activities. So if
    Iran doesn't blink, what is the--does the United States want to see
    immediate referral to the Security Council and--for punitive sanctions?
    And if so, what should those sanctions look like?
        The President. I appreciate that question. First of all, as you
    know, we have made strong steps. We've condemned strongly Iranians'
    attempt to develop any kind of program that would allow them to enrich
    uranium to develop a weapon. In other words, the Iranians said they were
    in compliance with certain international rules, and yet we found out
    they weren't in compliance of those rules. And so we're very deeply
    suspicious of their desires and called upon our friends in Europe,
    what's called the EU-3, Germany, France, and Great Britain, to lead the
    diplomatic efforts to convince the Iranians to give up their nuclear
    ambitions.
        First of all, I want to applaud the EU-3 for being strong in their--
    in presenting a unified voice. Secondly, in terms of consequences if the
    Iranians continue to balk, we'll work with the EU-3. In other words,
    they're the lead negotiators on behalf of the free world, and we will
    work with them in terms of what consequences there may be. And certainly
    the United Nations is a potential consequence.
        And I--just as I was walking in here, I received word that the new
    Iranian President said he was willing to
    get back to the table. Now, I don't want to put words in his mouth, and
    you're going to have to check that out before you print that in your
    story, but if he did say that, I think that's a positive sign that the
    Iranians are getting a message that it's not just the United States
    that's worried about their nuclear program, but the Europeans are
    serious in calling the Iranians to account and negotiating. I don't know
    if you've got that word or not. That's a positive development.
        But we'll work with our friends on steps forward, on ways to deal
    with the Iranians if they so choose to ignore the demands of the world.
    It is important for the Iranians to understand that America stands
    squarely with the EU-3, that we feel strongly the Iranians need to
    adhere to the agreements made in the Paris accord, and that we will be
    willing to work with our partners on--in dealing with appropriate
    consequences should they ignore the demands.
        Q. It sounds as if you're willing to give them more time to let this
    work out----
        The President. Well, the man said he
    wanted to negotiate, and of course--again, we're working with the EU-3.
    They're the lead negotiators. In other words, our strategy has been all
    along to make--to work with Germany, France, and Great Britain

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    in terms of sending a strong signal and message to Iran. And today it
    looked like that the new Iranian leader has heard that message. We'll
    have to watch very carefully, however, because, as I repeat, they have,
    in the past, said they would adhere to international norm and then were
    caught enriching uranium. And that's dangerous. We don't want the
    Iranians to have a nuclear weapon.
        The positive news, Deb, is, is that the world, at least the people
    we deal with--the Europeans, for example--are very--were knitted up in
    terms of the goal, and that is to prevent the Iranians from having a
    nuclear weapon.
        Patsy [Patricia Wilson, Reuters].

    Iranian Civilian Nuclear Program/North Korea

        Q. Thank you, Mr. President. You just said you were deeply
    suspicious of Iran's desires. Then my question is, why does the United
    States support a civilian nuclear program for Iran but not for North
    Korea?
        The President. Yes. The Iranians have expressed a desire to have a
    civilian nuclear program, and we've said that it is the--it makes sense
    only so long as the plant is under strong international inspection
    regimes, and the uranium used to run the powerplant is provided by a
    country with whom we're comfortable--with which we're comfortable, and
    the spent fuel is collected. In other words, there will be a strong
    regime--I talked about this at the National Defense University speech,
    about how we can enhance the spread of nuclear power but in a peaceful
    way that will assure countries that spent fuel will not be enriched for
    bomb-making capacities.
        Secondly, the Iranians have been, we hope, straightforward in their
    willingness to accept this kind of international cooperation.
        North Korea is in a different situation. The North Koreans have--
    didn't tell the truth when it came to their enrichment programs. But
    what's different about it is the South Koreans have offered power. In
    other words, the South Koreans have said, ``We'll build and share power
    with you,'' which seems to me to make good sense so long as the North
    Koreans give up their nuclear weapons, so long as there's full
    transparency, so long as there's the ability for the international
    community to know exactly what's going on in a potential weapons
    program.
        The strategy is the same, by the way, in terms of dealing
    diplomatically with both countries. As I mentioned, the EU-3 is taking
    the lead. We have a little different strategy, obviously, different
    players with North Korea, but nevertheless, it's the same concept, a
    group of nations are negotiating on behalf of the free world to let, in
    this case, Kim Chong-il understand that we're
    united in our desire to--for you to give up any ambitions to develop a
    nuclear weapon and united in our desire, by the way, to prevent you from
    proliferating.
        Bill Roberts [Bloomberg News]. This will be the last question.

    National Economy/Interest Rates

        Q. Thank you, Mr. President. Americans have grown accustomed to
    historically low interest rates over the last few years. How concerned
    are you and your economic advisers that as interest rates rise now, that
    could slow the momentum in the U.S. economy?
        The President. I think--first of all, as you know, that the Federal
    Reserve is completely independent from the White House. They make
    decisions independent of politics, and that's important. Ben used to serve on the Federal Reserve Board, so he's--
    he has had some insight into the workings of the Federal Reserve. But
    our job is to deal with fiscal policy, and the Federal Reserve deals
    with monetary policy.
        And as I've said all along, I trust the judgment of Chairman Alan
    Greenspan. He is--he makes decisions based
    upon facts, not based upon politics. And I think it's

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    important for the American people to understand that.
        In terms of whether interest rates will--the effect interest rates
    will have on our economy, I think we're more concerned about energy
    prices and health care prices. Those are the two areas that we see as
    having a greater effect on potential economic--on the growth, on the
    future of economic growth. And that's why the energy bill is an
    important start, and that's why we've laid out initiatives that we think
    will help American families deal with the--and small businesses deal
    with the rising cost of health care.
        Listen, thank you all. Great to see you. Mark [Mark Knoller, CBS Radio], good to see you, sir. Thank
    you.

      Note:  The President's news conference began at 12 noon at the Bush
    Ranch. In his remarks, he referred to Eileen M. Collins, commander, and
    James Kelly, pilot, NASA Space Shuttle Discovery; President Mahmud
    Ahmadi-nejad of Iran; Chairman Kim Chong-il of North Korea; and Ben S.
    Bernanke, Chairman, Council of Economic Advisers.