America's Economy Is ‘Thriving,' President Announces

President Bush said the American economy is "thriving" and criticized congressional Democrats for crafting programs that he said may derail growth or disrupt the path to a balanced federal budget. Mr. Bush, speaking to reporters at the Treasury Department after meeting with his economic advisers, reinforced his promise to veto legislation that doesn't meet his spending targets or raises taxes.

"Democrats in Congress have got a significant appetite for more federal spending" and are pushing a "massive tax hike," Mr. Bush said. "I will use the veto to keep your taxes low and to keep federal spending under control."

Mr. Bush and Democrats in Congress are on a collision course over the budget for the next fiscal year. Mr. Bush is demanding that lawmakers stay within the $933 billion he set for domestic discretionary spending, the portion of the budget subject to annual appropriations. That amount, a third of the total federal budget, is up $60 billion, or 6.9% from a year ago, and Democrats want to spend $22 billion more.

The president or his advisers have issued veto threats on nine of the 12 annual spending bills if they exceed his budget.

Mr. Bush and his economic advisers argue that the American economy is performing well with sustainable growth that continues to support job creation.

"The labor market is still strong," and America has adjusted to near-record oil prices "in a way that's not detrimental to the economy," Edward Lazear, the top White House economist, told reporters August 3.

The administration projects that the American government's budget deficit will drop to $205 billion this year, the lowest since 2002, before rising to $258 billion in 2008 as revenue growth slows. The White House projects a budget surplus three years after Mr. Bush leaves office.