Transcripts

President Bush Calls on Congress To Rescue The Economy

PAUL KANGAS: Fed policymakers weren't the only people talking about the economy in Washington, DC today. President Bush pressured Democrats in Congress to take action and pass his administration's economic and energy plans. But as Darren Gersh reports, it's unclear whether the president's energy policies will have their intended results.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: In a rose garden news conference, the president scolded Congress for blocking oil exploration in Alaska and stalling plans to expand refining capacity. When it comes to gas prices, the president told reporters, there are no easy solutions on energy.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: If there was a magic wand to say, OK, drop price, I'd do that. And so, part of this is to set the psychology right that says to the world, we're not going to become more beholden on your oil.

GERSH: But would the president's plan work? Industry observers say it would take 10 years to ramp up production in Alaska, a move that would supply roughly 1 percent of world demand. And demand for gasoline is falling just as production of alternative fuels like ethanol is rising. While Shell and BP announced record profits today, oil analyst Roger Diwan points out their refining margins are down more than 30 percent.

ROGER DIWAN, PARTNER, PFC ENERGY: The refining cycle for everyone in the (INAUDIBLE) industry is dead. I mean, we had three years of superb refining margins. It's gone and it's gone for a long time.

GERSH: Questioned whether ethanol production was pushing up food prices, the president said bad weather in parts of the world, along with rising demand played a more important role in driving dinner table inflation. Until recently, support for biofuels was deep and bipartisan in Washington. But criticism is growing. Scott Faber of the Grocery Manufacturers of America says ethanol is costing American consumers more at the checkout line.

SCOTT FABER, VP, FEDERAL AFFAIRS, GROCERY MANUFACTURERS OF AMERICA: You don't have to be a Ph.D. economist to understand that diverting food into our fuel supplies is going to increase the price of basic commodities like corn and soybeans and ultimately increase the price of everything we eat.

GERSH: Asked whether tomorrow's GDP report would show the economy is officially in a recession, the president would only say he expects the report to show the economy is very slow. Whatever it is officially called, the president described this as a sour and tough time for the American people. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.