[Weekly Compilation of Presidential Documents Volume 44, Number 2 (Monday, January 21, 2008)]
[Pages 84-86]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
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 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

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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 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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