Bush Says Pain From Economy Defies Easy Fix

WASHINGTON — With consumer confidence slipping and gasoline and food prices soaring, President Bush delivered an unusually dark assessment of the economy on Tuesday, saying the nation was in “very difficult times, very difficult.”There are no quick fixes, Mr. Bush said, to ease the pain Americans feel. Mr. Bush used a Rose Garden news conference to go on the offensive against the Democratic-controlled Congress, accusing lawmakers of being uncooperative on bills that would address pocketbook issues. Democrats pushed back, accusing Mr. Bush of trotting out old ideas and of favoring big oil companies at the expense of average Americans. The sharp exchanges struck a different tone from when the two parties joined forces on an economic stimulus package, including tax rebates that are being issued. Since then, the president and Congress have not agreed on addressing the economic troubles, and by Tuesday they mostly blamed each other. The paralysis is a product of election jockeying, as the parties avoid hard choices and try to inflict tough votes on the rivals. Although Democrats and Republicans came to terms on the tax rebates, neither has given way on bigger tax and spending issues. Both sides seem inclined to wait, hoping November shifts the balance in their favor. The gasoline price might be the most vexing problem for Congress, but after steady price increases, a quick solution seems elusive. “If there was a magic wand to wave, I’d be waving it, of course,” Mr. Bush said, referring specifically to gasoline prices, which have climbed $1.40 a gallon in 18 months. “But there is no magic wand to wave right now. It took us a while to get to this fix.” Instead of embracing new proposals, Mr. Bush mainly dusted off old ones. He called on Congress to address the cost of energy by opening the Arctic National Wildlife Refuge to drilling for petroleum and expanding nuclear power, two plans that have long been on the legislative shelf. Mr. Bush also said, “Those who worry about recession, slowdown, whatever you want to call it” ought to make his tax cuts permanent. Mr. Bush was cool to proposals by Senator John McCain of Arizona, the presumptive Republican nominee, and Senator Hillary Rodham Clinton of New York, a Democratic presidential contender, to give drivers a break by temporarily suspending the 18.4-cent-a-gallon federal excise tax on gasoline. The other Democratic contender, Senator Barack Obama of Illinois, on Tuesday dismissed the suspension of the gasoline tax as a gimmick. Mr. Bush similarly rejected an idea by a fellow Texas Republican, Senator Kay Bailey Hutchison, to stop making deposits in the Strategic Petroleum Reserve. “If I thought it would affect the price of oil positively,” he said, “I would seriously consider it.” Mr. Bush has spent much of his presidency riding high on claims of unparalleled job growth, but with nine months left in office, he has to confront a new reality. In recent weeks, he has said the economy is in a “rough patch.” This month, he expressed optimism, saying, “I’m confident we’re going to come out of it.” But his tone on Tuesday was more somber, reflecting a new report that found consumer confidence plummeting as home prices have collapsed more rapidly than at any time in 20 years. “I will tell you that these are very difficult times, very difficult,” he said while continuing to avoid the word “recession.” “And we’ll let the economists define it for what it is.” Americans, Mr. Bush said are “looking to their elected leaders in Congress for action.” “Unfortunately,” he added, “on many of these issues all they’re getting is delay.” Democrats responded with a news conference where Senator Charles E. Schumer, Democrat of New York, said: “He says he’s concerned with high gas prices and high food prices and student and home loan problems. But the truth is that the president has closed his eyes and put his hands over his ears as these crises have grown.” Mr. Schumer and other Democrats, including Senator Byron L. Dorgan of North Dakota, urged the administration to stop filling the Strategic Petroleum Reserve temporarily and work to limit speculative trading in oil futures. “Why not deal with the unbelievable orgy of speculation that’s occurring in these futures markets?” Mr. Dorgan asked. “That’s what’s driving up prices.” Mr. Bush attributed high prices to the lack of refining capacity and said opening the Arctic refuge, a proposal that Democrats and environmentalists have long opposed, would enable the United States to produce a million additional barrels of oil a day. He called it an “intermediate term” solution, saying, “It sends a signal to markets that the United States is not going to restrict exploration.” On housing, Mr. Bush called on lawmakers to pass two measures that have long been in the works, one to overhaul the Federal Housing Administration and the other to revamp the government-sponsored mortgage lenders, Fannie Mae and Freddie Mac. But he did not address a proposal being drafted by House Democrats to expand the availability of federally insured mortgages. Mr. Bush also said Democrats were “considering a massive, bloated farm bill” that would fail to eliminate farmers’ subsidies as food prices skyrocket and the farm economy thrives. “It’s not the time to ask American families who are already paying more in the checkout line to pay more in subsidies for wealthy farmers,” he said. When Democrats won control of Congress in November 2006, Mr. Bush promised to work with them. But their cooperation has been limited at best, and with the presidential campaign in full swing, it will be difficult for them to agree on all but the most noncontroversial questions. On Tuesday, signs were evident that Mr. Bush’s criticism of Democrats might actually widen gaps between lawmakers who share similar policy goals. Senator Mel Martinez, Republican of Florida, has recently expressed support for aggressive measures to prevent foreclosures, a huge issue in his home state. But after Mr. Bush’s news conference, Mr. Martinez echoed the president, saying he was skeptical of the measure that the House Democrats are drafting. “I think the last thing we need to do is create a program that is going to go into effect after the crisis is over and then become a new bureaucracy,” he said. At another news conference, Senate Republicans blamed Congressional Democrats for blocking efforts to increase oil production in the United States, both off the shores of states like Virginia and in Alaska. The minority leader, Senator Mitch McConnell of Kentucky, noted that gasoline prices were $1.20 a gallon higher than when Democrats took control of Congress in January 2007. One area where Democrats and Mr. Bush might find agreement, however, is student loans, a sector of the credit market that is not nearly as troubled as the mortgage market. The House last week passed a bill sponsored by Representative George Miller, Democrat of California, to increase amounts that students can borrow through federal programs. Mr. Bush praised it. “I hope the Senate moves it, moves a version of it very quickly,” he said.