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BUSH HOSTS A FEISTY VACATION SENDOFF

The president picks battles with Democrats as he sounds off on a variety of issues.

President Bush used a wide-ranging news conference - his last before a summer vacation - to chide lawmakers over a proposal to raise the gasoline tax to pay for repairs to hundreds of aging U.S. bridges.

He also tried to calm volatility in the financial markets on a day when the Dow Jones average lost nearly 400 points, denounced Iran as a "destabilizing influence" in the Middle East and continued to embrace Pakistani President Pervez Musharraf.

Over the course of 45 minutes in the newly refurbished briefing room, Bush appeared unmoved by criticism and unbothered by political troubles.

At one point, he light-heartedly raised his fists to imitate a boxer - "Okay, put up your dukes" - and seemed eager to mix it up with Congress in a variety of areas, scorning members for focusing on scandal rather than passing laws.

He was at his most cutting on the Minneapolis bridge issue, accusing members of Congress of squandering previous highway funding on pet projects as he rejected proposals to raise the gasoline tax by a few cents to pay for bridge repairs.

The broadside triggered a furious reaction from congressional Democrats. "For the past six years, Democrats have worked to fund our nation's most critical priorities, including investing in our infrastructure," said Senate Majority Leader Harry Reid, D-Nev.

Here's what Bush had to say on a variety of topics.

ECONOMY: "My belief is that people will make rational decisions based upon facts. And the fundamentals of our economy are strong." He added that he and his advisers believe the housing market, troubled by mortgage defaults, is not in a crisis. "It looks (like) we're headed for a soft landing. That's what the facts say."

CORPORATE TAXES: Bush said his administration is in the "very early stages" of considering whether to simplify the corporate tax code to lower tax rates across the board. He said any change would have to be "revenue neutral," with the lower rates offset by ending some specific tax breaks.

GUANTANAMO BAY: Bush said he had not seen a report by the International Red Cross that reportedly documents torture of prisoners at the U.S. detention facility in Guantanamo Bay, Cuba, but he insisted that "we don't torture." He said he was still working to close the facility. "We are working with other nations to send folks back.

PAT TILLMAN: He defended his administration's actions and promised a "full investigation" in the case of former Army Ranger and National Football League star Pat Tillman, who was killed by friendly fire in Afghanistan. The president sidestepped a question about when he learned that the death was an accident. "I can't give you the precise moment."

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