Bush touts mortgage plans, offshore drilling
Says moves to shore up Fannie Mae and Freddie Mac as well as lifting the offshore drilling ban will help Americans in 'time of stress.'
NEW YORK (CNNMoney.com) -- Under the backdrop of a deteriorating economic picture, President Bush said Tuesday he is taking action to help people with falling home values and high gas prices.
Bush highlighted plans to stabilize the mortgage lenders Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) and lift the ban on offshore oil drilling as two steps his administration is taking to address some of the nation's economic ills.
'It's been a difficult time for American families," Bush said at a press conference. "We must ensure we can continue providing credit during this time of stress."
On Sunday, the administration said it would provide capital and maybe buy stock in Fannie Mae and Freddie Mac, the country's two giant mortgage financing companies.
Stocks in the two firms plummeted last week on fears they were holding billions of dollars in bad loans. The turmoil at Fannie and Freddie raised fears the home lending market may dry up, sending home prices into a tailspin.
"I don't think it's a bailout," said Bush, deflecting some criticism that the government should not rescue a private firm. "The shareholders still own the company."
On the gas price front, Bush reiterated his call for more drilling off the East and West Coasts and in Alaska.
"The only thing standing between these vast resources and the American people is action from Congress," he said. "The sooner Congress lifts the ban, the sooner we can get these resources from the ocean floor to the refineries to the gas pump."
There were two bans restricting drilling off most of the U.S. coast - one from the President and one from Congress.
On Monday Bush lifted the executive ban, putting pressure on the Democratic-controlled Congress to do the same.
So far, the Democrats have resisted calls for more drilling, arguing the amount of oil it would bring to market would have little effect on prices, and the nation's efforts would be better spent developing alternatives to oil and focusing on conservation.
Bush agreed with one main argument for restricting drilling - that it would take years for the new supplies to come online. But still, he said that's no reason to not act.
"There's a psychology in the market that says supplies will stay stagnant while demand rises," he said. "It seems to make sense to say to the world that we're going to explore for oil and gas, to send a message that supplies will increase."
Bush rebuffed calls by some Democrats to release some oil from the nation's Strategic Petroleum Reserve in an attempt to lower gas prices.
"The SPR is for emergencies," he said. "That doesn't address the fundamental issue."
Democrats took the emergency comment as a chance to pounce.
"Whether the president knows it or not, there is an emergency in our country," House Speaker Nancy Pelosi, D-Calif., said in a statement after Bush's news conference.
Pelosi again called for the President to release a small amount of oil from the SPR.
Bush's speech comes at a time when the nation is focused on economic issues. While the economy is not technically in a recession, news on the economic front has not been good.
Home prices are down about 15% nationwide over the last year, according to a recent numbers from the Case/Shiller home price index. The economy has lost jobs for the last six months in a row. And Wall Street has moved into a bear market, with stocks trading 20% below recent highs.
"When will the economy turn around? I'm not an economist," said Bush, responding to a reporter's question. "But I do believe we're growing. I'm an optimist, and there are a lot of positive things about our economy."