President Bush told Americans Monday that the economy is doing much better than polls suggest they think it is, but he warned that the pension system is in trouble because too many companies aren't making good on their promises.

"Government does not create wealth. American businesses and workers and farmers and entrepreneurs create the wealth for this country. And so the role of government is to create an environment where small businesses can grow into a big business," Bush told workers at the Deere-Hitachi Construction Machinery Corp. in Kernersville, N.C.

"This economy is strong. Business is booming and the people of this country are working," Bush said.

Before speaking, the president toured the Deere-Hitachi plant located between Winston-Salem and Greensboro. The plant is run equally by John Deere and the Japanese firm Hitachi. Approximately 90 percent of all Deere mid-sized hydraulic excavators are manufactured at the Kernersville plant.

Wearing a pair of eye guards, the president went from station to station until he came upon a nearly completed excavator. One of the company's 1,000 employees handed Bush a remote control with buttons that could raise or lift the giant machine from the ground. Bush smiled, and without touching the button advised: "I'd be careful if I were you." He then climbed some stairs, was handed some tools and work gloves and performed the final assembly on the new piece of equipment.

Because of the high output, Bush showcased the plant as an example of insourcing. It has taken over some manufacturing that Hitachi used to do in Japan and Mexico, and has tripled its workforce in the past few years.

"That's what open markets mean ... we want to have free trade and we want to have fair trade," he said.

Still, organized labor is blasting the president over the 2.8 million manufacturing jobs lost since he took office. Bush countered that manufacturing jobs have grown for the last 30 months. He said the Kernersville plant is proof the benefits of global trade flow both ways.

Bush said that the economic report released Friday shows "nearly 4.5 million new jobs added" since May of 2003; an unemployment rate that is at 5 percent, well below the averages of the 1970s, 1980s and 1990s. Last quarter, the economy grew at a healthy 4.3 percent.

The president expanded on remarks he made Friday in the Rose Garden that the latest job report is showing "sustained economic growth." Bush credited the economic growth in part to tax cuts that let people "decide how to spend your own money.

"These cuts are making a real difference to American families," he said, detailing an array of tax cuts passed in 2001 and 2003 for individuals and businesses. Bush noted that small businesses are responsible for the largest number of jobs created, and warned that the tax cuts are set to sunset in the next five years.

Back in Washington, some folks want to take more out of your paycheck by rolling back the tax cuts," Bush said. "One way to keep this economy growing is to have certainty in our tax code ... and so the United States Congress needs to make this tax relief permanent."

After the president's speech, House Minority Leader Nancy Pelosi, D-Calif., said Bush was promoting tax cuts to a group that hardly benefits.

"As he spoke before a group of working Americans, the president touted his tax cuts for the wealthy few - Americans who make more than $1 million will receive an average tax cut of $103,000 or nearly 140 times the average tax cut that middle-income households will receive," she said.

"Meanwhile, the budget deficit is out of control, and Americans are facing record-high heating costs, rising health care bills, and the threat of unemployment. Platitudes and photo-ops by the president suggesting a strong economy simply do not make it so," Pelosi added.

Among the good news, the president mentioned that home ownership, including minority home ownership, is at an all-time high. He promoted job-training programs in community colleges, saying workers need to be skilled in the jobs that are emerging, not the ones that are becoming obsolete.

Bush's approval on handling the economy was at 37 percent in an AP-Ipsos poll in early November, the lowest rating yet on the economy. The speech is part of a new PR campaign launched by the White House. On Friday, the government announced 215,000 jobs created in November in the face of hurricanes Katrina and Rita and rising energy prices.

"Our trust in the American people has brought us through some pretty tough times," he said referring to a stock market crash, high energy costs, natural disasters, a terror attack and a recession over the last five years.

Aides have acknowledged that the war in Iraq and high energy prices were making people generally uneasy. Bush said the more gasoline that is available to consumers, the less pressure there will be on families to pay their high energy bills.

"We've got to produce more crude oil and natural gasoline in environmentally sensitive ways ... and we can do that," Bush said, repeating the call to drill in the Arctic National Wildlife Refuge. He said production there would produce 1 million barrels of oil per day while creating a footprint of 2,000 acres on a 19-million acre parcel of land.

"I can't tell you how important I think it is for the United States Congress to authorize a pro-growth, pro-job, pro-environment exploration of ANWR," he said.

Bush said health care is a major aspect that will help the economy grow. He called for the expansion of health information technology and community care facilities, and urged medical liability reforms.

The president also said Health Savings Accounts would allow people to save money to pay for their personal health care. Bush said 1 million families have enrolled in the program since he signed it into law.

"You make the decisions. Secondly, you own the HSA, and if you happen to change jobs ... Under this plan, it's your own health care plan, and you can take it with you to your next employer. And the employer can help you with your HSA, if that's the deal you're able to strike with them. ... It makes your future more stable," he said.

Bush called the upcoming deficits expected in Social Security and Medicare "unfunded liabilities," and urged Congress to come up with plans to continue to protect baby boomers in their retirement years.

But with the president's own Social Security reforms going nowhere fast, three of Bush's Cabinet members, the secretaries of labor, the treasury and commerce, wrote an op-ed for The New York Times last month. They warned the pension insurance system hasn't had an increase in premiums in 14 years and can't pay its bills.

The article said legislation emerging from Senate negotiations would relax rather than strengthen funding rules for pensions, while a bill moving through the House was weakened by the long transition period it allows before tighter funding requirements take effect.

"Unless these bills are strengthened, they could result in weaker pension funding that increases the potential that workers will lose benefits and taxpayers will have to bail out the pension insurance program," the article said. It was signed by Labor Secretary Elaine Chao, Treasury Secretary John Snow and Commerce Secretary Carlos Gutierrez. The three are also planning speeches on the economy later this week.

Bush said that he has proposed pension reform that gives companies the chance to keep their promise to fund workers' retirements.

"If you make a promise to a worker, you need to put enough money in the account to keep that promise," Bush said while addressing corporate workers. He said he has proposed legislation that requires companies to measure accurately and adequately fund their pension plans. The proposal gives companies seven years to catch up and fill their plans when they fall behind.

"That seems reasonable to me. We're going to give you a little time to do what you said you're going to do," Bush said, echoing the secretaries' op-ed that some in Congress want to weaken pension reform by not forcing companies to live up to their obligations.

"If you put in the hours, your pension should be there for you when you retire. ... I am not going to sign a bill that weakens pension funding for the American workers," he said.

Bush also noted that "if more and more companies fail to meet their responsibilities the federal government may have to step in and bail them out," adding that the cost will fall on taxpayers.

FOX News' Wendell Goler and The Associated Press contributed to this report.