Bush Says He's Prepared To Reassure Markets
Seeking to restore confidence in the nation's ailing economy and financial sector, President George Bush acknowledged Tuesday it is a "tough time" for many Americans, but said his administration was prepared to do whatever is necessary to reassure the markets.
"I think the system is basically sound, I truly do," the president said, speaking to reporters at the White House press briefing room, adding that he realized "there's a lot of nervousness."
Amid soaring gas prices, the most depressed real estate market in decades, falling home prices and tight credit, Bush defended his administration's efforts to stabilize the economy.
He lent his support to a plan to prevent the publicly traded, government-sponsored Freddie Mac and Fannie Mae from collapsing under the weight of their bad loans.
The bailout would allow the Federal Reserve to extend a line of credit to the troubled lenders, which between them hold or guarantee $5 trillion worth of U.S. home mortgages.
"I don't think most Americans realize how important Freddie Mac and Fannie Mae are," Bush said. "We must ensure they can continue providing access to mortgage finance."
The president's news conference came as Federal Reserve Chairman Ben Bernanke appeared before the Senate Banking Committee to explain the Freddie and Fannie plan.
Bush repeatedly referred to the Fed measures as temporary. He also signaled that there was no immediate plan for a government takeover of Freddie and Fannie, saying the administration would "work to ensure they remain shareholder-owned companies."
Asked whether the government might try a similar rescue for other troubled firms, Bush said, "I don't think the government ought to be involved in bailing out companies."
Many critics, however, have argued that the rescue plan effectively forces taxpayers to cover shareholders' losses.
The president also took the opportunity to bash lawmakers for not moving more quickly to open up offshore drilling to bring down high fuel prices. Earlier this week, Bush lifted an executive ban on drilling that was put in place while his father was president.
"The only thing standing between the American people and these vast reserves is action from Congress," he said. He later added that people should conserve and "be wise" about how they use gas and energy.
Bush admitted that tapping fresh domestic reserves would have little or no immediate effect on the price of gasoline at the pump.
"I readily concede it won't produce a barrel of oil tomorrow, but it will reverse the psychology," he said.
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