DETROIT (AP) — President Bush, who is trying to gain support for his second-term goal of changing Social Security and improving the economy, made a strategic stop yesterday in Michigan, which lost thousands of jobs during his first term.

Ken Srdjak
President Bush addresses the Detroit Economic Club yesterday. Bush was in Detroit one day after sending a $2.57 trillion federal budget proposal to lawmakers on Capitol Hill.

“It is time to confront great challenges,” Bush told an audience of around 1,500 people at a Detroit Economic Club luncheon. “If you care about the quality of life for our children and grandchildren, now is the time.”

Bush spoke about his plans to expand the economy, including reduced federal spending, tax cuts, lawsuit reform and ensuring free trade and affordable, reliable energy. He also spoke at length about his plan to overhaul Social Security.

It was Bush’s second visit to Michigan this year and his second speech to the Detroit Economic Club. He first spoke to the club during the 2000 campaign.

Michigan’s unemployment rate was 6.8 percent last year, lower than in 2003 but still higher than the national rate of 5.4 percent. Since December 2003, Michigan has lost 47,000 payroll jobs, mostly in manufacturing.

“Parts of our country struggle just like Michigan. I’m very aware of that,” Bush told those in attendance at yesterday’s speech, including the chief executives of Detroit’s Big Three automakers, Mayor Kwame Kilpatrick, Cardinal Adam Maida, Secretary of State Terri Lynn Land and Attorney General Mike Cox.

General Motors Corp. CEO Rick Wagoner said Bush’s goal of a business environment that is dynamic and flexible is a good one. He said GM supports Bush’s tax cuts and wants to see a long-term fix for Social Security. He also said Bush understands the weight of health care costs on Detroit’s automakers.

“We share the view that health care costs need to be brought under control,” Wagoner said.

Bush’s proposed budget — released Monday — includes a boost in spending on the military, which could be a boon for defense-related manufacturers in Michigan. It also calls for increased Medicaid spending in Michigan. But the proposed budget would cut education funds and subsidies to farmers, which could hurt Michigan.

Bush also discussed his No. 1 domestic priority, allowing younger workers to set aside some of their Social Security earnings in private investment accounts. Bush says Social Security will be running a deficit by 2018 and his plan would help stop the red ink.

“The government has made a promise to younger workers that it cannot pay for,” Bush said. “The whole world is watching to see if we have the courage to fix this problem.”

Michigan Democrats say the Social Security plan is a dangerous one for the 1.7 million people who receive Social Security in Michigan. Rep. Sander Levin (D-Detroit) said Democrats want to keep Social Security solvent but believe Bush’s plan is expensive and wouldn’t help the shortfall.

“We Democrats are always ready to help out, but not to divert these moneys and not to add terribly to the debt and not to cut benefits for younger workers,” Levin said.

Levin was among those who released a report Monday by the Institute for America’s Future, a liberal Washington group, which said young Michigan workers would lose an average of $151,703 in benefits by the time they retire in 2050 under Bush’s plan.

Bush said benefits will be cut, but workers could make up for that with personal accounts that have a higher rate of return that the government now offers. Without his plan, he warned, Social Security will face a $300 billion shortfall by 2033.

“If we don’t act now, imagine what life is going to be like trying to fill that hole,” Bush said.

About 20 people — some holding signs reading “No War,” others wearing T-shirts urging no changes to Social Security — protested Bush’s visit from a spot near Cobo Center, where the president delivered his speech.

 

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