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Bush, Greenspan split on economy outlook
President's upbeat remarks about economy tempered by Greenspan's federal budget concerns.
December 2, 2005: 12:54 PM EST
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WASHINGTON (CNN) - President Bush on Friday credited "good old-fashioned American hard work" for what he called the current "vibrant" state of the economy.

"Our economic horizon is as bright as it's been in a long time," the president said in brief remarks in the Rose Garden at the White House, citing the latest job creation and unemployment figures released earlier in the day.

But the president's rosy outlook differed from that of Federal Reserve Chairman Alan Greenspan, who said hours earlier in videotaped remarks that the United States' "budget position will substantially worsen in the coming years unless major deficit-reducing actions are taken."

"I do not mean to suggest that the nation's budget problems will be solved simply by adopting a new set of budgeting rules," Greenspan said in his speech to the policy forum of the Federal Reserve Bank of Philadelphia.

"The fundamental fiscal issue is the need to make difficult choices among budget priorities, and this need is becoming ever more pressing in light of the unprecedented number of individuals approaching retirement age.

"For example, future congresses and presidents will have to weigh the benefits of continued access, on current terms, to advances in medical technology against other fiscal initiatives," the chairman said. (More on Greenspan's speech).

Greenspan warned that the "soaring cost of medical care" for the country's aging population will place a burden on the budget that "economic growth alone is unlikely to eliminate."

Bush declared that the country's economy continues to gain strength and momentum, "thanks to good old-fashioned American hard work, and productivity, innovation and sound economic policies of cutting taxes and restraining spending."

He cited a government report Friday that showed 215,000 jobs were added in the month of November, and that unemployment remained steady at 5 percent.

"That's in spite of the fact that we had hurricanes and high gas prices," the president said.

Bush said the foundation for growth in the country is strong, and is "based on low taxes, restrained government spending, legal reform and incentives for saving and investment."

"This economy is in good shape," he told reporters. "We're not going to rest until every American who wants a job can find one."

Greenspan also declared that the country's economic activity was "expanding at a reasonably good pace" as 2006 approached, but he said the positive short-term outlook is tempered by "a backdrop of concern about the prospects for the federal budget over the longer run."

The chairman called for the reinstatement of restraints on the budget-making process, like those in the now-expired Budget Enforcement Act of 1990.

Any new legislation should also include provisions to deal with unanticipated budget outcomes, Greenspan said.

The president didn't address future budget legislation. His brief remarks ended with a promise to continue to push for pro-growth policies.

He then walked briskly away from the podium, ignoring shouted questions from reporters.

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For more on November's jobs report, click here.

Missed out on the rest of the day's headlines? Click here.  Top of page

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