    [Public Papers of the Presidents of the United States: George W. Bush (2008, Book I)]
    [January 18, 2008]
    [Pages 95-97]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks on the National Economy
    January 18, 2008

        Over the past several months, I've held a series of meetings with my
    economic team on the outlook of--for the U.S. economy. And before I left
    for the Middle East, I directed them to conduct a thorough assessment of
    our economic condition, consult with Members of Congress, and provide me
    with their recommendations about any actions we might need to take.
        The economic team reports that our economy has a solid foundation,
    but that there are areas of real concern. Our economy is still creating
    jobs, though at a reduced pace. Consumer spending is still growing, but
    the housing market is declining. Business investment and exports are
    still rising, but the cost of imported oil has increased.
        My administration has been watching our economy carefully. My
    advisers and many outside experts expect that our economy will continue
    to grow over the coming year, but at a slower rate than we have enjoyed
    for the past few years. And there is a risk of a downturn. Continued
    instability in the housing and financial markets could cause additional
    harm to our overall economy and put our growth and job creation in
    jeopardy.
        In recent months, we've taken steps to shore up the housing market,
    including measures to help struggling homeowners avoid foreclosure and
    to keep their homes. I've also--have asked Congress to pass legislation
    to modernize the Federal Housing Administration and enable it to provide
    additional assistance to struggling homeowners. The House passed a bill,
    and the Senate passed a bill, and now they need to get together and get
    a bill to my desk as quickly as possible.
        After careful consideration and after discussions with Members of
    the Congress, I have concluded that additional action is needed. To keep
    our economy growing and creating jobs, Congress and the administration
    need to work to enact an economic growth package as soon as possible.
        As Congress considers such a plan, there are certain principles that
    must guide its deliberations. This growth package must be big enough to
    make a difference in an economy as large and dynamic as ours, which
    means it should be about 1 percent of GDP. This growth package must be
    built on broad-based tax relief that will directly affect economic
    growth and not the kind of spending projects that would have little
    immediate impact on our economy. This growth package must be temporary
    and take effect right away so we can get help to our economy when it
    needs it most. And this growth package must not include any tax
    increases.
        Specifically, this growth package should bolster both business
    investment and consumer spending, which are critical to economic growth.
    And this would require two

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    key provisions. To be effective, a growth package must include tax
    incentive for American businesses, including small businesses, to make
    major investments in their enterprises this year. Giving them an
    incentive to invest now will encourage businessowners to expand their
    operations, create new jobs, and inject new energy into our economy in
    the process.
        To be effective, a growth package must also include direct and rapid
    income tax relief for the American people. Americans could use this
    money as they see fit: to help meet their monthly bills, cover higher
    costs at the gas pump, or pay for other basic necessities. Letting
    Americans keep more of their own money should increase consumer spending
    and lift our economy at a time when people otherwise might spend less.
        Yesterday I spoke to members of the congressional leadership from
    both political parties. They shared with me their thoughts on the best
    way forward, and I was encouraged by those discussions. And I believe
    there is enough broad consensus that we can come up with a package that
    can be approved with bipartisan support. I've asked Treasury Secretary
    Hank Paulson to lead my
    administration's efforts to forge an agreement with Congress so that we
    can deliver this needed boost to our economy as quickly as possible.
        Passing a new growth package is our most pressing economic priority.
    When that is done, Congress must turn to the most important economic
    priority for our country, and that's making sure the tax relief that is
    now in place is not taken away. A source of uncertainty in our economy
    is that this tax relief is set to expire at the end of 2010. Unless
    Congress acts, the American people will face massive tax increases in
    less than 3 years. The marriage penalty will make a comeback, the child
    tax credit will be cut in half, the death tax will come back to life,
    and tax rates will go up on regular income, capital gains, and
    dividends. This tax increase would put jobs and economic growth at risk,
    and Congress has a responsibility to keep that from happening. So it's
    critical that Congress make this tax relief permanent.
        We're in the midst of a challenging period, and I know that
    Americans are concerned about their economic future. But our economy has
    seen challenging times before, and it is resilient.
        In a vibrant economy, markets rise and decline. We cannot change
    that fundamental dynamic. As a matter of fact, eliminating risk
    altogether would also eliminate the innovation and productivity that
    drives the creations of jobs and wealth in America. Yet there are also
    times when swift and temporary actions can help ensure that inevitable
    market adjustments do not undermine the health of the broader economy.
    This is such a moment.
        By passing an effective growth package quickly, we can provide a
    shot in the arm to keep a fundamentally strong economy healthy. And it
    will help keep economic sectors that are going through adjustments, such
    as the housing market, from adversely affecting other parts of our
    economy.
        I'm optimistic about our economic future because Americans have
    shown time and again that they are the most industrious, creative, and
    enterprising people in the world. That is what has made our economy
    strong, and that is what will make it stronger in the challenging times
    ahead.
        Thank you.

    Note: The President spoke at 11:34 a.m. in the Roosevelt Room at the
    White House.

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