WASHINGTON: President George W. Bush called last Friday for congress to act quickly on a stimulus plan worth around US$140 billion (K411 billion) to revive a US economy that some fear is on the brink of recession.
Bush’s announcement came amid a growing consensus in political circles on the need to enact a plan to help stave off a downturn with a stimulus programme based on tax rebates and breaks for businesses.
“Our economy has a solid foundation, but there are also areas of real concern,” Bush said in a White House announcement aimed at providing the outline for a stimulus plan.
He called on congress “to enact an economic growth package as soon as possible.”
Bush said the package “must be big enough to make a difference in an economy as large and dynamic as ours, which means it should be about 1% of GDP.”
Treasury secretary Henry Paulson said that on that basis, the package should be “in the neighbourhood” of US$140 billion to US$150 billion (K440 billion).
“The package should be robust enough to make an impact this year, and should be temporary so that it doesn’t impact our long-term fiscal position,” Paulson said.
The effort comes amid growing calls on Capitol Hill for a stimulus to help an economy hurt by the worst housing slump in decades, which has led to massive losses in the banking sector and now appears to be hitting manufacturing.
Some lawmakers and officials are pressing for tax-rebate checks of at least US$300 (K881) per taxpayer, with some seeking as much as US$800 (K2,349) per person or US$1,600 (4,698) per household, in addition to various business tax breaks.
With recession fears rising fast, Bush and Republican lawmakers appeared willing to make a concession to Democrats by accepting legislation that would not include an extension of Bush’s tax cuts, which the White House has been seeking.
Bush said he had consulted with lawmakers and added: “I believe there is enough broad consensus that we can come up with a package that can be approved with bipartisan support.”
The news came amid the latest round of weak economic news and a downward spiral on Wall Street that prompted Federal Reserve chairman Ben Bernanke and others to talk up the need for swift action.
Speaking before congress last Thursday, Bernanke said a stimulus programme of between US$50 billion (K 147 billion) and US$150 billion (K440 billion) would be “reasonable,” but he said any programme should be limited and temporary, and should be carried out rapidly. – AFP