(CBS/AP) President Bush said today that while it's clear the economy has slowed, the government needs to guard against going too far to fix it, cautioning that "one of the worst things you can do is overcorrect" a troubled fiscal outlook.
Democrats, in response, said Mr. Bush is relying on inaction to solve the nation's economic problems.
Mr. Bush, in his weekly radio address, said the recently-passed program of tax rebates for families and businesses should begin to lift the economy in the second quarter of the year and have an even stronger impact in the third quarter.
But he urged caution about doing more, particularly about the crisis in the housing market where prices are tumbling and home foreclosures have soared to an all-time high. He said pursuing other administration actions, such as reforms in bankruptcy laws, would make a complicated problem even worse.
"If we were to pursue some of the sweeping government solutions that we hear about in Washington, we would make a complicated problem even worse - and end up hurting far more homeowners than we help," the president said.
"In the long run, we can be confident that our economy will continue to grow, but in the short run, it is clear that growth has slowed," Mr. Bush said.
The president's address came a day after his speech before the Economic Club in New York City, where he conceded that the United States "obviously is going through a tough time" but expressed confidence about a rebound.
"These are uncertain times," he said, as evidence of an ailing economy piled up: The dollar fell, oil and gold hit record highs, the economy is shedding jobs, retail sales saw a big drop, and the effects of a severe credit squeeze linger.
The economy has surpassed the Iraq war as the number one concern among voters in this presidential election year amid big job losses, soaring fuel costs, a credit crisis and turmoil on Wall Street.
In a statement, Senate Majority Leader Harry Reid, D-Nev., said his party knows that a wait-and-see approach is not a responsible strategy for an economy on the brink of recession.
"The president continues to convince himself that inaction is the cure-all for the economic problems hurting hardworking Americans," Reid said in a written statement.
Democrats said they would try to strengthen the economy with measures dealing with housing, energy efficiency and renewable energy.
"Wages and home values are down," Reid said, "but prices for everything from health care to tuition to energy are up. Just this week, oil and gas prices reached record highs while the value of the dollar reached historic lows. I hope the president, who has been slow to acknowledge this problem, joins us in recognizing how urgently we need a solution."
Mr. Bush said he opposed several measures pending on Capitol Hill to deal with the housing crisis. They included proposals to allocate $400 billion to purchase foreclosed-upon and now-abandoned homes, to change the bankruptcy code to allow judges to adjust mortgage rates and to artificially prop up home prices.
"Many young couples trying to buy their first home have been priced out of the market because of inflated prices," the president said. "The market now is in the process of correcting itself, and delaying that correction would only prolong the problem."
Mr. Bush said his administration has offered steps offering flexibility for refinancing to homeowners with good credit histories yet are having trouble paying their mortgage. He cited other measures which he said would streamline the process for refinancing and modify many mortgages.
He said there were steps Congress could take, as well.
"As we take decisive action, we will keep this in mind: When you are steering a car in a rough patch, one of the worst things you can do is overcorrect," the president said.
"That often results in losing control and can end up with the car in a ditch," Mr. Bush said. "Steering through a rough patch requires a steady hand on the wheel and your eyes up on the horizon. And that's exactly what we're going to do."