Bernanke, Bush Call for Economic Stimulus

Federal Reserve Chairman Ben Bernanke and President Bush Thursday both called for an economic stimulus package to prevent the country from going into a recession. The Associated Press reports that Bernanke said such a plan should be quickly implemented and temporary so that it won't complicate longer-term fiscal challenges.

And he said that something that would get money into the pockets of Americans now, would be more effective than other measures, including making President Bush's tax cuts permanent.

But the president doesn't seem to be opposed to jump-starting the economy. At the White House, spokesman Tony Fratto said, "The president does believe that over the short term, to deal with the softening of the economy, that some boost is necessary." It's the first confirmation from the white House that Bush supports government intervention.

But as NPR's Brian Naylor reports, the devil is in the details. Both parties want to present a united front on any measure taken to boost the economy, but they are not close to agreeing on what specifically needs to be done.

Brian reports that "Democrats [and some Republicans] tend to favor some direct cash infusions to low- and middle-income Americans in the form of tax rebates, by extending jobless benefits for those out of work, and by making food stamps more available."

Former Treasury Secretary Lawrence Summers said any stimulus package should add up to $75 billion to $100 billion - and maybe twice that.

But some Republicans want to see the president's tax cuts extended, while another group of conservative House Republicans want to cut the corporate income tax rate from 35 percent to 25 percent.

12:56 PM ET | 01-17-2008 | permalink | comments (7) | e-mail post