Bush acts to reassure nation

President signs $15 billion bailout for airline industry

Terrorism Strikes America

September 23, 2001|By Mark Matthews and Paul West | Mark Matthews and Paul West,SUN NATIONAL STAFF

WASHINGTON - With the nation's security crisis in danger of becoming an economic one as well, President Bush tried yesterday to shore up public confidence in the rattled U.S. economy.

Late in the day, the president signed a $15 billion bailout for U.S. airlines, struggling with slack demand and widespread layoffs since the suicide attacks in New York and Washington.

Bush acknowledged that the terrorism had dealt "a shock" to an already weakened U.S. economy. But he added that the country remains "fundamentally strong" and predicted an improved business climate "in the years ahead."

The president, spending the weekend at Camp David, held a video conference with his national security advisers as U.S. forces moved toward an expected strike against the terrorist network of Osama bin Laden in Afghanistan.

Bush also spoke for an hour with Russian President Vladimir V. Putin, their third phone conversation since the crisis began. The White House called the talk constructive but offered no details.

The president was also preparing to sign an executive order identifying specific terrorists and terror groups and freezing any assets in the United States that have not previously been covered, the White House said.

Military preparations received a boost with a pledge by Turkey, a NATO ally, to allow American planes to use its airspace. But Saudi Arabia, another key regional ally, continued to have concerns about the extent of any U.S.-led retaliatory strike.

This morning, Bush will preside at a ceremony marking the end of a national period of mourning that began Sept. 11. He will raise the flag to full staff at the presidential retreat atop Maryland's Catoctin Mountain.

Bush devoted his only public remarks yesterday to reassuring a nervous nation about the state of the economy, which was severely rocked by the assault Sept. 11.

More than 100,000 workers have lost jobs, and many more are likely to be thrown out of work as aftereffects of the attack continue to roll across the country. The plunging stock market, in its worst week since the early 1930s, has knocked more than $1 trillion off the value of stocks held by millions of ordinary investors.

Many economists say the question isn't whether the country has entered a recession but how deep it will be and how long it will last.

"Our economy has had a shock," said Bush, adding that many companies in the tourism and travel industry, such as airlines, hotels and restaurants, are now in a "struggle to remain afloat."

Bush also praised businesses that have made "extra efforts to avoid laying off workers, even during difficult times." He added that he would work with Congress on other steps to improve air travel safety and bolster the economy.

"I want to remind the people of America we're still the greatest nation on the face of the Earth," Bush said. "No terrorist will ever be able to decide our fate."

House Democratic leader Richard A. Gephardt offered a similar refrain in remarks coordinated with the administration.

"There is no place for partisanship here. We are not Democrats first or Republicans first. We are Americans first," he said. "And as Americans, we will work together to do what needs to be done."

Gephardt said the government would assist other industries, beyond the travel industry, that have been damaged as a result of the attack.

Pressure is growing for additional action by the government to rescue the economy. The Business Roundtable, which represents many of the country's biggest corporations, urged Bush late last week to take immediate steps to encourage consumers and businesses to spend more.

Administration officials and congressional leaders, advised by Federal Reserve Chairman Alan Greenspan to wait at least a week or two, have not made final decisions on the shape and scope of any new aid package for the economy. Among the proposals that have been made are tax cuts for businesses and individuals on top of the $1.6 trillion tax reduction enacted earlier this year.

Beyond the layoffs announced, hundreds of thousands of workers are expected to lose their jobs as hotels, restaurants, manufacturers and others trim payrolls in the face of declining travel and a slumping economy.

The nation's unemployment rate, which rose to 4.9 percent in August, could reach 7 percent by next year, some economists are predicting. The last time joblessness was that high was during the recession of the early 1990s.

Bush did not attempt to predict when the business climate might turn around. He pointed to steps that the administration and Congress had taken to boost the economy, including the $1.6 trillion tax cut.

He also noted that energy prices have remained steady and are lower now than they were last spring. Energy analysts have said a reduced demand for oil, stemming from the economic slowdown, should keep prices from spiking upward, unless there is an interruption in petroleum supplies as a result of military action overseas.

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