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President George W. Bush today will argue that the sputtering U.S. economy is fundamentally sound without offering new initiatives to stimulate it or to help homeowners facing mortgage defaults.

“Americans should have confidence that this economy will return to stronger growth,'' said White House spokesman Tony Fratto, previewing an address Bush plans to give today to a gathering of business and finance leaders in New York. “You shouldn't look for new major announcements.''

A surge in defaults on mortgages to higher-risk borrowers spurred the collapse of the U.S. home loan market. Defaults have continued to rise even as the Federal Reserve has cut the benchmark interest rate five times since September. The Bush administration has urged lenders to help homeowners by modifying mortgage terms.

Congress wants the government to do more. House Financial Services Committee Chairman Barney Frank and Senate Banking Committee Chairman Christopher Dodd, saying the U.S. is in a recession, offered a plan yesterday to let the Federal Housing Administration insure refinanced mortgages after lenders reduce principal to help struggling borrowers.

The two lawmakers are leading congressional efforts to tackle the surge in foreclosures, which reached record levels in the fourth quarter of 2007. The plan they unveiled yesterday goes beyond the Bush administration's industry-led approach that urges lenders and servicers to modify loans for borrowers who can't make their monthly payments.

`Addressing Wall Street'

Bush speaks to the Economic Club of New York, which was founded “during the panic of 1907,'' according to Jan Hopkins, its executive director. The 750-member club includes chief executives, investment strategists, money managers and professors.

“What he's really doing is addressing Wall Street,'' Hopkins said in an interview yesterday. She said the president accepted an open-ended invitation to speak to the club. “The timing was the White House's,'' Hopkins said.

After the speech, Bush will be questioned by two panelists: Paul Gigot, editorial page editor of the Wall Street Journal, and Gail Fosler, president of the Conference Board, a New York- based economic research group best known for its consumer confidence survey and report on leading economic indicators cash advance.

“They're going to want to know the president's view of the economy,'' Hopkins said. “The questions will be on housing, markets, the dollar, interest rates, oil prices, taxes.''

`Temporary Phenomenon'

Fratto called the housing crisis “a temporary phenomenon'' that will pass.

“We know exactly how many subprime mortgages are out there,'' he told reporters yesterday at the White House. “We know that over time we're going to be able to work down those inventories'' and “this economy will return to growth.''

Fratto said Bush, in his speech, will talk about “how he sees the economy today.''

“Americans should have confidence that this economy will return to stronger growth,'' Fratto said. He cited the $168 billion stimulus plan the administration worked out with Congress last month, which includes tax rebates ranging from $300 to more than $1,200 for some families.

“We're going to start to see the benefits of that soon,'' Fratto said. Checks are scheduled to arrive in mailboxes beginning the second week of May.

Fratto said Bush today will once again call on the Democratic Congress to extend tax cuts that expire in 2010, and he will note that foreign investments are welcome in the U.S. and that he's pushing for new trade agreements that he says creates jobs.

“Those are the kinds of things the president is focused on,'' Fratto said.

`Epicenter' of Crisis

John Lonski, chief economist at Moody's Investors Service, said Bush should tailor his remarks toward the “epicenter'' of the U.S. credit crunch: troubled homeowners who can't pay the monthly mortgage.

“Until you improve the housing outlook, you're going to have considerable difficulty at encouraging banks that are now saddled with these troubled home mortgages to increase the supply of credit to private sector borrowers,'' he said in a telephone interview yesterday.

The Economic Club of New York has hosted past U.S. presidents, including Woodrow Wilson, John F. Kennedy, Richard Nixon, Ronald Reagan and George H.W. Bush, according to its Web site.

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