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Bush Blames Congress for Failing to Act on Energy (Update2)

By Roger Runningen and Catherine Dodge

April 29 (Bloomberg) -- President George W. Bush blamed Congress for blocking his initiatives to mitigate rising energy costs by expanding domestic production and said lawmakers also are delaying action on other measures to address higher food costs and the mortgage crisis.

``It's a tough time for our economy,'' Bush said at a news conference today at the White House. While the public is demanding action, ``on many of these issues, all they are getting is delay.''

The president dismissed calls to stop federal purchases of crude oil for the Strategic Petroleum Reserve and he declined to endorse proposals to suspend collection of federal gasoline and diesel taxes as ways to cut costs to consumers.

Democratic leaders, who have majorities in the House and Senate, responded to Bush's remarks by faulting administration policies and accusing the president of failing to act.

Bush ``has closed his eyes and put his hands over his ears as these crises have grown,'' Senator Charles Schumer, a New York Democrat, said at a news conference after Bush spoke.

While Bush addressed foreign policy issues including the Middle East, Afghanistan and Africa, the U.S. economy and energy were the main subjects, as they have been in the political campaign to succeed him next year.

Economic Outlook

The president declined to say whether the U.S. economy is in a recession.

``Economists can argue over the terminology,'' Bush said. ``The average person doesn't really care what we call it.''

The Commerce Department tomorrow is scheduled to release the government's initial estimate of first-quarter gross domestic product. Bush said he hadn't been briefed on the numbers and expected ``they'll show that it's a very slow economy. I can't guess what the number will be.''

The median estimate of economists in a Bloomberg News survey is that the economy probably expanded at a 0.5 percent pace from January through March. That would be the smallest gain in five years.

With gasoline prices up an average of 66 cents from a year ago to $3.60 a gallon and diesel up to $4.24 a gallon from $2.92 last year, the administration is facing calls for action to stem the increases.

Petroleum Reserve

A group of 14 Senate Republicans earlier today asked Bush to stop buying crude oil for the Strategic Petroleum Reserve to ease price pressures, matching a similar request previously made by Democrats in the House.

The reserve, authorized for 1 billion barrels stored mainly in salt caverns along the Gulf Coast, was created to deal with supply disruptions. Bush said it was in the national interest to fill it for that reason.

Besides, he said, halting the 67,000- to 68,000-barrel a day input would do little to ease the cost of gasoline because it amounts to about 0.1 percent of global demand.

``I have analyzed the issue and I don't think it would affect price,'' Bush said.

Republican Kay Bailey Hutchison of Texas, one of the senators who made the request, said it's time for a pause in purchases. ``The family budget is under intense pressure'' and supplies in reserve now exceed U.S. energy program commitments, she said in a statement after Bush spoke.

Suspending Federal Tax

Bush declined to endorse other short-term measures as well. In the presidential campaign, Democrat Hillary Clinton and Republican John McCain are urging a three-month moratorium on collecting the 18.4-cent per gallon federal gasoline tax and the 24.4-cent tax on diesel fuel. Democrat Barack Obama opposes a tax suspension, saying it will do little for consumers and will divert money needed for highway and bridge repairs.

Bush said he would ``take a look'' at any proposals that may come from Congress. He said Congress would open more domestic land to oil exploration if it was ``truly interested'' in solving the problem of high gas prices.

Lawmakers have been ``vocal'' in opposing measures to expand U.S. oil production, including exploration in the Arctic National Wildlife Refuge in Alaska, he said.

Democrats said Bush's policies exacerbate the problem.

House Democratic Caucus Chairman Rahm Emanuel in a statement said Bush ``remains addicted to the big oil companies, and the big oil companies remain addicted to the billions of dollars in taxpayer subsidies they receive from this administration.''

Food, Housing

On the rising cost of food, which Bush said is related to higher energy prices, the president said lawmakers also were partly at fault because they have failed to overhaul the ``massive, bloated'' farm bill. Now is the time for ``reducing unnecessary subsidies'' to wealthy farmers, he said.

``We are deeply concerned about food prices here at home,'' Bush said. This year, he said, the U.S. would be ``generous'' in food donations because of scarcities overseas.

He also called on lawmakers to act on his proposals to ease the housing crisis.

``Americans should not have to wait any longer for their elected officials to pass legislation to help more people stay in their homes,'' Bush said.

Home prices in 20 U.S. metropolitan areas fell in February by the most on record, pointing to an imbalance between supply and demand that shows no sign of ending.

Prices will probably keep sliding as foreclosures push even more properties onto the market just as stricter lending rules limit the number of qualified buyers. Shrinking home values have contributed to a slowdown in consumer spending that may already have tipped the economy into a recession.

To contact the reporter on this story: Roger Runningen in Washington at rrunningen@bloomberg.net; Catherine Dodge in Washington at Cdodge1@bloomberg.net

Last Updated: April 29, 2008 13:31 EDT

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