Bush restates faith in economy, consumers

WASHINGTON, July 15 (UPI) -- President George Bush Tuesday tried to assuage U.S. consumers' concerns about a skittish U.S. economy, saying the long-term foundation is sound.

"I think the system basically is sound," Bush said during a wide-ranging news conference. "I understand a lot of (consumers') nervousness ... but the economy is growing, production is high, trade is up and people are working."

Treasury Secretary Henry Paulson has requested temporary authority to help stabilize Fannie Mae and Freddie Mac either through a credit line or capital investment, if needed, Bush said.

"It's really important for people to have confidence in the ... stability in the mortgage market," Bush said of the troubled lenders seeking new capital. "We understand how important these are to the markets."

The action -- which needs congressional approval -- isn't a bailout for either Fannie Mae or Freddie Mac because they still answer to their shareholders, Bush said.

Regarding commercial banks, Bush stressed that deposits up to $100,000 were backed by the federal government.

"My hope is people take a deep breath .. and realize their deposits are protected by the federal government," Bush said.

The president said the economy could be strengthened by passage of bills that would modernize the Federal Housing Authority, strengthen regulation of Fannie Mae and Freddie Mac, as well as energy-related legislation and measures concerning trade agreements with Columbia, South Korea and Panama.

Bush noted that 112 million households have received more than $91 billion in economic stimulus checks, the effects of which should be felt later this year.