U.S. Treasury Secretary Henry Paulson said on Friday that high energy and health care costs were interfering with Americans' ability to feel the benefits of a solidly growing economy.
Paulson and other top advisers spoke with reporters on a conference call after meeting President George W. Bush at the presidential retreat in Camp David, Md., where they talked over the condition of the economy.
Administration officials, with congressional elections in November, have expressed private frustration that polls indicate many Americans feel uneasy about their future and don't credit the White House for an expanding economy.
They're much better off than they would be if the economy were growing slower or weren't growing, but many Americans aren't feeling it in terms of their own economic situations, Paulson conceded. Part of this is a result of energy costs and health care, he said.
But there were reasons for hope.
I would be optimistic that if that we can keep job creation and productivity levels high, you're going to see wage growth follow this, Paulson said.
A significant part of the discussion at Camp David dealt with how to deal with the issue of so-called entitlement costs for government-funded health and retirement plans, Paulson indicated. As baby boomers born after World War Two retire, Social Security and Medicare costs are projected to soar.
Paulson, who just stepped into the Treasury portfolio last month to become the administration's third treasury secretary, has previously identified entitlement costs as the single greatest challenge to the country's long-term prosperity.
One thing we all feel pretty strongly about that, whatever the issues we are dealing with, it's easier to deal with them with a strong, growing economy that's creating new jobs, Paulson said.
In response to questions, Paulson said progress was being made in bringing the government's budget deficit under control and suggested it was not a problem in the same league as entitlement costs.
When we look at the deficit, all of us wish it were less, but if we look at it as a percentage of GDP (gross domestic product) it's at a very comfortable level, he said.
As for entitlement costs, Paulson said it's quite possible to come up with a fix that's quite do-able provided that Congress backs the administration's efforts.
Former Treasury Secretary John Snow tried unsuccessfully to build public support for a White House proposal to set up private investment accounts as part of an overhaul of the Social Security program.