Bush predicts U.S. economy will rebound

WACO, Texas, Aug 13 Reuters reported that President George W. Bush on Tuesday predicted a rebound in the ailing U.S. economy and urged Wall Street to clean up its act at an economic forum designed to show him engaged on a volatile issue looming large in November mid-term elections.

Bush, criticized by Democrats for staging a forum that excluded their leaders, heard mostly endorsements of his policies from the handpicked audience of 250 executives, union members, small investors, top officials, students and scholars at Waco's Baylor University. Vice President Dick Cheney and many Cabinet members presided over some of the sessions.

"Even though times are kind of tough right now, we're America. I am incredibly optimistic about the future of this country, because I understand the strength of the country. The strength of our country is its people," Bush said.

With economic growth in the April-June period at a lackluster 1.1 percent, budget deficits soaring and control of both houses of Congress up for grabs in mid-term elections, Bush held the forum to hear ideas on how to restore growth and push his own prescriptions for the economy.

"We're pleased with some progress but we've got more to do," Bush told a session on economic recovery and job creation. He pledged to give any ideas that emerge a good hearing.

And in a shot across the bow at Congress, Bush said he would refuse to release $5.1 billion in homeland security money that would go to purposes other than guarding the nation. He defended his action on the grounds of fiscal restraint.

Congress had authorized the funds for airport and embassy security, refugee aid for Afghanistan, $200 million for Israel and $50 million in humanitarian relief for Palestinians in the West Bank and Gaza. Some $200 million would fight HIV/AIDS and other diseases abroad.

"Those who wrote the bill designed it so I have to spend all five of the extra billion dollars or spend none of it. ... I understand their position, and today they're going to learn mine. We'll spend none of it," he said in a feisty speech wrapping up the forum.

Democrats were dismissive of the forum.

"By limiting this meeting largely to like-minded participants and special interests, the administration protects its policies from serious scrutiny. The result is likely to be a forum long on rhetoric and short on solutions," said South Carolina Democratic Rep. John Spratt.

The sessions had a boardroom-like atmosphere with speakers seated around tables making prepared remarks.

Bush urged Congress to approve terrorism insurance to allow $8 billion in construction projects to proceed "to get American hardhats back to work" -- and approve tort reform to cap medical malpractice lawsuit awards.

BETTER DISCLOSURE

He urged the investment industry to adopt self-policing measures to provide clearer financial disclosure, to complement a government crackdown on corporate criminals and help restore confidence in the markets. Bush said the industry must adjust to accommodate ordinary, less market-savvy Americans who have flocked to the stock markets over recent decades.

"There needs to be better disclosure so that people feel confident that they're not being led down the primrose path of fancy financial footwork," Bush said.

Bush heard some criticism, and evidence that consumer confidence is weak.

"With all due respect, people feel that the government is not moving quick enough to take punitive actions against the CEOs who have destroyed the public trust in our institutions and in our public markets," Sheri Orlowitz, chief executive of manufacturing company Shan Industries, told Bush.

Accountant June Lennon told Bush the federal government should lead by example by keeping better books.

"The government accounting system is pretty kind of hard to explain. I've been there 18 months trying to figure it out," Bush replied, drawing laughter.

Businesspeople offered varying views on the economy, with Boise, Idaho-based grocery chain Albertsons Inc. Chairman Larry Johnston saying: "Consumer confidence is weak ... We see them buying things things like hamburger instead of steak."

The guest list included some prominent Democrats but mostly they appeared to be supporters of the president.

Sitting next to Bush in the job creation session was Van Eure, owner of the Angus Barn Restaurant in Raleigh, North Carolina, who said what Bush wanted to hear, she favored elimination of what Republicans call "the death tax," the estate tax.

"I'm just honored to be sitting next to one of my heroes," Eure said.

The administration was pushing an upbeat message that a rose was waiting to bloom in the gloomy thicket of recent economic data.

Treasury Secretary Paul O'Neill told a panel there were many reasons to be positive about the economy, despite a recent loss of momentum.

"I see lots of reasons to be positive," O'Neill said, citing strong auto sales and other factors. "Consumer spending is still very strong and so I think that there are many reasons to be optimistic."

Aides say the meeting was not expected to generate any new policies, at least in the short term.

Having watched his father's Gulf War popularity collapse in 1992 because of a struggling economy, Bush wants to avoid falling into the same trap of appearing out of touch with working Americans as he fights his global war on terrorism.