President Bush is meeting with his economic team Thursday and Friday for his annual review of America's finances. They are expected to discuss the rising cost of payments to an aging population.
The team of advisers meeting at the presidential retreat at Camp David includes Vice President Dick Cheney as well as the secretaries of Treasury, Commerce, Labor, and Health and Human Services.
Their review of the economy comes amid signs of slowing growth, with the overall increase for this quarter expected to fall below three percent, about half the pace at the start of the year.
The index of leading U.S. economic indicators fell last month. The New-York-based Conference Board index is dropping at an annual rate of 1.4 percent over the last six months, its worst performance since February of 2001.
Higher fuel prices and a slower housing market are contributing to that fall. White House officials say the president remains confident that lower taxes will boost government revenues and reduce budget deficits as they did last year.
President Bush says the biggest budgetary challenge is money committed to entitlement programs, including the federal retirement program and medical benefits.
Speaking Thursday, Mr. Bush said the approaching retirement of millions of the so-called Baby Boom generation will make paying for the entitlement programs even more difficult.
"As more Baby Boomers stop contributing payroll taxes and start collecting benefits, people like me, it will create an enormous strain on our programs," said Mr. Bush. "Entitlement programs are projected to grow faster than the economy, faster than the population, and faster than the rate of inflation."
If nothing is done, President Bush says spending on entitlement programs will be nearly 60 percent of the federal budget by 2030.
"And that is going to leave future generations with impossible choices - staggering tax increases, immense deficits, or deep cuts in benefits," he added. "We have an obligation to confront this problem now."
Reforming the federal retirement program known as Social Security was the president's biggest priority for his second term. That ran into opposition from Democrats and some Republicans in Congress concerned about the stability of private retirement accounts.
The president says he will continue his push to reform Social Security after congressional elections in November.