Bush acknowledges economic uncertainty, asks Congress to do more

By Jeannine Aversa\nThe Associated Press\nWASHINGTON – President Bush, acknowledging that the country is suffering through a period of economic uncertainty, called on Congress Monday to do more to help people and businesses hurt by the housing slump and credit crunch.\nIn a brief introduction to his annual economic report, Bush said the $168 billion economic rescue package passed by Congress last week will keep “our economy growing and our people working.”\nStill, other steps need to be taken to strengthen the economy, he said. The president exhorted lawmakers to make his tax cuts permanent and do more to help struggling homeowners at risk of losing their houses.\nBush is expected later this week to sign an economic stimulus package that includes rebates of $600 to $1,200 to most taxpayers and $300 checks to disabled veterans, the elderly and other low-income people. \n“Money will be going directly to American workers and families and individuals,” he said.\nIn addition, the package includes tax breaks for businesses and would take some steps to boost the ailing housing market.\nTo that end, the legislation would temporarily raise to $729,750 the limit on Federal Housing Administration loans and the cap on loans that mortgage giants Fannie Mae and Freddie Mac can buy. Raising that cap on Fannie Mae and Freddie Mac should provide relief in the market for “jumbo” mortgages – those exceeding $417,000. The credit crunch hit that market hard, making it very difficult, if not impossible, for people to get those loans. And, that has plunged the housing market even deeper into turmoil.\nBush urged Congress to pass additional legislation that would revamp Fannie Mae and Freddie Mac and modernize the Depression-era Federal Housing Administration, which insures mortgages for low- and middle-income borrowers. The president also said Congress should approve legislation allowing state housing agencies to issue tax-free bonds to help squeezed homeowners refinance their mortgages.\nThese and other steps could help struggling homeowners “weather turbulent times in the market,” Bush said.\nDescribing the report to reporters, Bush said the stimulus plan is “going to help deal with the uncertainties.” As for the broader economic assessment, he said it indicates “our economy is structurally sound in the long term and that we’re dealing with uncertainties in the short term.” The question, Bush added, is what can be done about it.\nFallout from the housing bust and harder-to-get credit has catapulted home foreclosures to record highs, has forced financial companies to rack up multibillion-dollar losses in bad mortgage investment, has rocked Wall Street and has dealt a powerful blow to the national economy.\nThe economy nearly stalled in the final three months of 2007, growing at a pace of just 0.6 percent. The odds of a recession have grown considerably during the last year, and an increasing number of analysts believe the economy may actually be shrinking now.\n“Our economy is undergoing a period of uncertainty, and there are heightened risks to our near-term economic growth,” Bush said in his economic report to Congress. \nHe said the stimulus package should “insure against those risks.”\nThe administration is hopeful the country will skirt a recession. The last one was in 2001, shortly after Bush first took office.