President Bush rebuffed questions Thursday about raising the federal gasoline tax to pay for infrastructure improvements and said there is enough liquidity in the market to weather the fallout from sub-prime mortgage defaults.
In a wide-ranging news conference ahead of his vacation to Kennebunkport, Maine, Mr. Bush also commented on reports that Pakistan President Gen. Pervez Musharraf was considering declaring a state of emergency to quell unrest there.
After last week's bridge collapse in Minneapolis and the close scrutiny of the nation's infrastructure that has followed, some Democrats in Congress have proposed raising the federal gasoline tax to repair failing roads and bridges.
"Before we raise taxes, which could affect economic growth, I would strongly urge the Congress to examine how they set priorities," he said.
About $24 billion, or 8 percent of the last $286 billion highway bill, was devoted to highway and bridge projects singled out by lawmakers. The balance is sent in the form of grants to states, which then decide how it will be spent. Federal money accounts for about 45 percent of all infrastructure spending.
More than 70,000 of the nation's bridges are rated structurally deficient, including the bridge that collapsed over the Mississippi River on August 1. The American Society of Civil Engineers says repairing them all would require spending at least $9.4 billion a year for 20 years. Rep. Jim Oberstar (D-MN) says his tax increase proposal would raise about $25 billion over three years.
As the president spoke to reporters, Wall Street was in a steep decline after a French bank said it was freezing three securities funds that struggled to find liquidity in the U.S. subprime mortgage market, a situation that has stalked the markets for days.
"I am told there is enough liquidity in the system to enable markets to correct," Mr. Bush said.
Asked if he would support a "bail-out" for those losing their homes, the president said: "If you mean direct grants to homeowners, the answer would be no, I don't support that. If you mean making sure that financial institutions like the FHA have got flexibility to help these folks refinance their homes, the answer is yes, I support that."
Mr. Bush said one solution was to promote more "financial literacy" and transparency for financial documents because "a lot of people sign up for something that they don't understand," referring to complaints that many home buyers did not understand risky sub-prime and adjustable-rate mortgages.
On terrorism, Bush said he is confident in the ability of Musharraf to crack down on militants at the Afghan border and cooperate with the U.S.
He said he expected Musharraf to take "swift action if there is actionable intelligence inside his country." Bush refused to address whether the U.S. troops would go into Pakistan without permission from leaders there.
"We spend a lot of time with the leadership in Pakistan talking about what we will do with actionable intelligence," Bush said. "Am I confident they (terrorists) will be brought to justice? My answer is, `Yes I am.' "
The most heated exchange followed a question about Attorney General Alberto Gonzales. Members of Congress from both parties have called Gonzales' credibility and leadership of the Justice Department into question and some Democrats have called for an inquiry into whether Gonzales committed perjury during his Senate testimony last month.
"Why would I hold somebody accountable who's done nothing wrong?" the president said, then turning the issue back on the Democratic-led Congress.
"Matter of fact, I would hope Congress would become more prone to deliver pieces of legislation that matter rather than being the investigative body," he added.
From NPR reports and the Associated Press
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