WASHINGTON — President Bush vowed Wednesday to veto bipartisan legislation that would sharply increase funding for a popular health insurance program for poor children.
In a wide-ranging interview with economic reporters, Bush also shrugged off Wall Street volatility, discounted fears that credit is drying up in the U.S. economy, said the housing-sector's problems still point to a "soft-landing" and opposed any bailout for homeowners or lenders.
Bush met with economic writers shortly after reading a statement in the Treasury Department's ornate Cash Room, flanked by Vice President Dick Cheney and the administration's entire economic team. He was seeking to calm both consumers and investors rattled by several weeks of Wall Street volatility.
"The underpinnings of the economy are strong, 3.4 percent growth in the second quarter, strong unemployment numbers, low inflation, real wages are on the rise, there is a strong global economy that means it more likely that somebody will buy our goods, our services," Bush said. "The basic fundamentals are good."
Asked if he'd veto legislation that increases funding for the State Children's Health Insurance Reauthorization Act, called S-Chip, Bush answered while the question was still being asked.
"If S-Chip is used to expand the nationalization of health care, I will veto it," he said. He said that he'd proposed increasing S-Chip funding in his budget, but much less than Congress wants.
Bush proposed a $5 billion increase over five years. Last week the House voted 225-204 for a $50 billion increase over five years, and the Senate voted 68-31 for a $35 billion increase over five years. The Senate margin would override a veto, but the House's wouldn't. The two versions must be reconciled before Congress sends the measure to Bush for his signature or veto.
The top Republican on the Senate Finance Committee, Iowa's Charles Grassley, has said he'll try to convince the president that "common sense dictates not vetoing this." More than 20 Senate Republicans face re-election next year, and few want to vote against a popular health care bill for poor children.
S-Chip covers children whose families earn too much to qualify for Medicaid but not enough to pay for private insurance. The bills would make an estimated 3.2 million additional children eligible for S-Chip. Bush says this expansion is a first step toward government-funded universal health coverage.
On the economy, Bush said he wasn't worried about recent sharp swings on Wall Street.
"It's the nature of the market," he said.
Despite indications that the housing downturn is more severe than anticipated, Bush said he believes it still reflects a "soft landing" scenario that won't result in serious harm to the economy.
"That's kind of what it looks like so far," the president said.
Bush twice dodged the question of whether Fannie Mae, the quasi-government company that buys mortgages and packages them as bonds sold to investors, should be allowed to rescue troubled homeowners. But he suggested that he'd back an expanded role for the Federal Housing Administration in helping troubled borrowers refinance their homes.
Bush criticized bipartisan legislation that aims to slap penalties on Chinese-made goods if China doesn't relax its controls on the value of its currency. He said cheap Chinese imports have helped keep inflation down in the United States and said that even if such legislation passed Congress, it was unlikely to trigger a trade war.
"It's not in China's interest to create a trade war with the United States," Bush said, noting that China faces enormous pressure to keep its economy growing to improve living standards for its 1.3 billion citizens.
Bush also slammed Democrats for what he called protectionist and tax-and-spend policies. He shrugged off criticism by fiscal conservatives that his administration for six years failed to veto any Republican spending bills that added to budget deficits.
Bush also said that he'd called San Francisco Giants slugger Barry Bonds on Wednesday to congratulate him on becoming baseball's all-time home-run leader. Bush told the star that he was touched when Bonds grabbed his son at home plate after tying Hank Aaron's record over the weekend.
"Some of the great highlights of my life were being with a guy I love in dramatic moments, and that picture of him hugging his son stuck with me," Bush said, referring to his own famous father. "I thought it an important moment between a father and a son."
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