Bush Praises U.S. Efforts In Middle East, Improvements in Economy In New Year

To President Bush, 2005 was a year in which America grew more prosperous, advanced the cause of freedom abroad and enhanced its security at home. "Our duties continue in the new year," he said.

In his weekly radio address Saturday, Bush lauded political developments in Iraq and Afghanistan and offered Americans reassurance that progress was being made.

"This year, we watched the Iraqi people defy the terrorists and suicide bombers and hold three successful elections, voting to choose the only constitutional, democratic government in the Arab world," Bush said in the New Year's Eve broadcast, taped at his Texas ranch.

"We also saw the people of Afghanistan elect a democratic parliament in a nation that only a few years ago was ruled by the Taliban."

In the new year, the president said, U.S. troops will find and clear the enemy out of Iraqi cities and towns, transfer more control to Iraqi units and bolster security forces so they can take the lead in securing the nation. He said his administration also would help the Iraqis build political institutions and a stronger economy.

"Our coalition is overcoming earlier setbacks and moving forward with a reconstruction plan to rebuild Iraq's economy and infrastructure," Bush said. "As we help Iraq build a peaceful and stable democracy, the United States will gain an ally in the war on terror, inspire reformers across the Middle East and make the American people more secure."

On the homefront, Bush stressed improvements in the U.S. economy and the push to make tax cuts permanent and expand trade. He plans to deliver a speech on the economy Friday after visiting the Chicago Board of Trade.

The administration can point to the creation of 1.8 million new jobs in the past year, and the economy grew at a lively 4.3 percent pace in the third quarter -- the best showing in more than a year.

The performance offered fresh testimony that the country's overall economic health managed to improve despite the destructive force of Gulf Coast hurricanes.

And although there are concerns about federal budget deficits, Republicans hope that touting improvements in the economy will blunt Democrats' attempts to use it as an issue in next year's elections and help shift public attention away from casualties in Iraq.

"Inflation is low, productivity is high and small businesses are flourishing," Bush said. "Real disposable income is up. Consumers are confident, and early reports suggest good retail sales this holiday season."

The president also applauded the House and Senate for voting before the holiday recess to cut mandatory spending by nearly $40 billion. "This will be the first reduction of entitlement spending in nearly a decade," he said.

Federal Reserve Chairman Alan Greenspan has warned that U.S. deficits are set to soar with the impending retirement of 78 million baby boomers and has suggested that Congress consider trimming Social Security and Medicare benefits.

If something isn't done to trim benefit costs, the resulting budget deficits would "cast an ever-larger shadow" over the future living standards of Americans, the outgoing Fed chairman said earlier this month.