President Bush is again defending his economic record, saying the nation's fiscal health is on the mend. It's become a major theme of his re-election campaign.

The Democrats say the president is not doing enough to boost employment in the United States, noting the White House is backing off its earlier job creation projections.

The president has distanced himself from those projections, and is trying to keep the focus on tax policy. He says the tax cuts he pushed through Congress are spurring economic growth and new jobs will be created if these cuts are made permanent.

"See, if Congress doesn't do anything there will be tax increases on the American people. That's what that means," he said. "When you hear we're going to repeal the Bush tax cuts they mean tax increases."

The president predicts it will be a major topic of debate throughout this election year, and he makes clear he wants to go before the American people and take on his critics. "There is a philosophical difference here. Who do you want spending your money, you or the federal government? And that is the debate I look forward to taking across the country," he said.

Mr. Bush spoke Thursday from an auditorium on the White House grounds, surrounded by a small group of supporters. His remarks came shortly after the front-runner for the Democratic Party's presidential nomination got a key endorsement. The nation's largest federation of labor unions, the AFL-CIO, announced it is backing Massachusetts Senator John Kerry.

White House Spokesman Scott McClellan downplayed the importance of this major labor endorsement. He said union leaders have a history of backing Democrats, but added many union members lean Republican.