The U.S. economy is slowing to a steady growth rate that provides a basis for dealing with necessary changes to retirement and health care programs, Treasury Secretary Henry Paulson said today.
"Our economy appears to be transitioning from a period of above-trend growth to a more sustainable level of about three percent growth," Paulson said in testimony prepared for the tax-writing House Ways and Means Committee.
He said President Bush's $2.9 trillion fiscal 2008 budget proposal reflects rising tax revenues and a strong fiscal position "from which we can address long-term challenges such as strengthening Social Security and Medicare for future generations.
Paulson said strengthening Social Security and Medicare before waves of retiring baby boomers begin to stress the programs was one of the most important things that lawmakers could do to ensure continued economic growth.
"I look forward to sitting down with Democrats and Republicans, without preconditions, and finding common ground on these critical issues," Paulson said.
Last week in a CNBC television interview, Paulson sounded pessimistic about chances of persuading Democrats, who control both houses of Congress, to support Social Security changes.
"There's not a high degree of likelihood. I'm not naive, given how politically contentious this is that we'll get this done," Paulson said, adding it may be left to the next president to reform Social Security.
The Bush administration has just two years left.
Paulson's predecessor, John Snow, tried unsuccessfully in 2005 to promote a White House proposal for making private accounts a part of the Social Security system. The plan was solidly opposed by Democrats on grounds that it represented a back-door bid to privatize the retirement system.