Econ Policy Huddle At White House
President Bush said Wednesday at the first day of a two-day economic conference that American companies are suffering a competitive disadvantage around the world because of the high cost of lawsuits and legal insurance at home.
"The costs of frivolous lawsuits in some cases make it prohibitively expensive for a small business to stay in business or for a doctor to practice medicine, in which case it means the health care costs of a job provider or job creator is escalating," Mr. Bush said.
Mr. Bush appeared at only one of Wednesday's four panels, entitled "lawsuit abuse." But in news conferences, Mr. Bush and his administration outlined the tentative plan for reforming Social Security and reiterated that making his tax cuts permanent is a priority.
Democrats have complained that the administration should be focusing on rolling back tax cuts that went primarily to the wealthy as a better way to control budget deficits rather than trying to make them permanent at a cost of more than $1 trillion.
Very soon, CBS News Correspondent Wyatt Andrews reports, Mr. Bush will appoint a blue ribbon panel on taxes to give him advice. According to Andrews, the panel might be full of revolutionary ideas, such as a 20 percent flat tax.
On Social Security, President Bush defended the plan to
in stocks and bonds that follow the flux of the market.President Bush dismissed concerns about investing some Social Security funds in the stock market, saying Democrats' warnings about risk are campaign scare tactics.
"The people in our country have heard this notion of so-called risky scheme adjectives in the 2000 campaign and the 2004 campaign," the president said when asked about workers possibly losing money in private accounts and Democrats' claims that partial privatization is a "risky scheme."
"They realize, like I realize, now is the time to deal with the problem," Mr. Bush told reporters in the Oval Office.
Social Security is the Bush administration's top legislative priority for next year. The issue will be the centerpiece of the White House's economic conference Thursday.
In his speech Wednesday at the conference, Mr. Bush reiterated his oft-stated plea for Congress to impose caps on legal awards.
"Justice ought to be fair," he said. "Those who have been hurt ought to have their day in court. But a judicial system run amok is one that makes it really hard for small businesses to stay in business."
Though the White House said the economic conference would include a broad cross-section of people, no one on the panel with the president disagreed with him on the issue of liability reform, reports CBS News Correspondent Mark Knoller.
The White House chose not to invite a representative of trial lawyers, who portray Mr. Bush as a tool of the insurance industry.
According to CBS Correspondent Mika Brzezinski, Mr. Bush's
:Vice President Dick Cheney opened the conference, saying it is critical to make
during his second term while achieving broader reforms in the tax code and bolstering Social Security.Cheney said the administration believed the four tax cuts over the past four years had provided a badly needed boost to get the economy out of recession. But he said now the focus needed to be on making the tax cuts permanent.
"We still have more work to do, but we believe we are on the right track," Cheney told the audience of business leaders, economists and Washington lobbyists.
Mr. Bush meanwhile pledged to work with Congress to reduce the government's huge budget deficit as a key step in assuring the world that his administration supports a strong dollar.
"We'll do everything we can in the upcoming legislative session to send a signal to the markets that we'll deal with our deficit, which, hopefully, will cause people to want to buy dollars," President Bush told reporters.
President Bush's comments came following a meeting at the White House with Italian Prime Minister Silvio Berlusconi, who had raised the issue of the dollar's plunge in value against the euro, the currency of Italy and 11 other European nations.
"The policy of my government is a strong dollar policy," President Bush said during a brief news conference following the Oval Office meeting, echoing statements he and Treasury Secretary John Snow have made numerous times over the past three years as the dollar's value has fallen sharply against many major currencies.
President Bush's comments did not prevent financial markets on Wednesday from pushing the dollar's value lower against a range of currencies, including the euro. Currency markets focused more on a Treasury Department report showing that foreigners' purchases of U.S. stocks and bonds in October fell to the slowest pace in a year.
A weaker U.S. currency would make American exports cheaper and thus more attractive in foreign markets while driving up the costs of imported cars, television sets and the billions of dollars of other foreign products that American consumers have been snapping up.
President Bush's comments on the dollar came one day after the government reported that the U.S. trade deficit hit a monthly record of $55.5 billion in October.
Mr. Bush told reporters that the trade deficit is "easy to resolve. People can buy more United States products if they're worried about the trade deficit."
The swelling size of the trade deficit has raised concerns among economists that the dollar's decline, which has been gradual so far, could suddenly accelerate as foreigners grow worried about the ability of the United States to keep attracting enough foreign capital to finance trade deficits at such high levels.
If the dollar were to suddenly plummet in value, that could cause foreign investors in U.S. stocks and bonds to rush for the exits. Such a development would send stock prices plunging and interest rates soaring. Some analysts believe the shock would be enough to push the country into another recession.
President Bush said that the administration's efforts to support the dollar by reducing government borrowing levels would address the unfunded liabilities in the government's huge entitlement programs, Social Security and Medicare.
"I told the prime minister that Social Security reform will be at the top of my agenda," said Mr. Bush, speaking as the White House kicked off a two-day economic conference designed to build support for Bush's second term agenda.
Meeting with a small group of reporters, Treasury Secretary John Snow called reducing the budget deficit "the linchpin of the second-term economic policies." The administration has vowed to cut the deficit, which hit a record $412 billion in 2004, in half by 2009.
Snow said putting controls on government spending is "right at the heart of deficit reduction."