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Bush Administration Defends Economic Policy

The Bush administration is defending its handling of the U.S. economy at a time of growing public unease. VOA's Paula Wolfson reports during a series of interviews on American television Treasury Secretary Henry Paulson stressed the government will do what it takes to maintain stability in the financial system.

The White House is waging an all-out effort to ease election year fears about the economy.

Polls show it is the number-one issue on the minds of most Americans, and from the president on down administration figures are seeking to reassure the public.

They stress the fundamentals of the economy are sound, and steps are being taken to ensure the current slowdown is temporary. A stimulus package of tax rebates and small business incentives has been signed into law.

And on Friday, the U.S. central bank helped strengthen a major investment firm facing collapse. The firm - Bear Stearns - was caught up in the crisis in the home mortgage market.

On CNN's Late Edition program, Treasury Secretary Paulson said the action taken by the Federal Reserve was warranted.

"Our number-one priority with everything we are doing in the economic arena is to minimize instability, minimize spill over into the real economy, and I think that is pretty clear from the actions you have seen the government take," said Paulson.

Paulson said officials are continuing to keep a close watch on the turmoil on the financial markets, but declined to say if the government would step in again to rescue an investment firm.

Instead, he tried to keep the focus on the positive. During an appearance on ABC's This Week program, he expressed confidence that the financial markets would work their way out of the current crisis.

"Our financial institutions - our banks and investment banks - are very strong and I am convinced that they are going to come out of this situation very strong," he said. "Our markets are resilient, flexible. I am quite confident we are going to work our way through this situation."

But top Democrats in Congress are less sure about the prospects for a speedy recovery, and they are putting the blame for the nation's economic woes squarely on the Bush White House.

House Speaker Nancy Pelosi told This Week the Bush administration waited too long to take action.

"I think that much of what the administration has done has been too late," said Nancy Pelosi.

Pelosi noted that Democrats are already working on a second economic-stimulus package. President Bush has said he wants to give the current plan a chance to work before taking further measures.

The president meets with his advisory panel on financial markets on Monday. Among those taking part in the discussions will be Paulson and Federal Reserve Chairman Ben Bernanke.