Pelosi dampens idea of second stimulus

WASHINGTON Thu Mar 12, 2009 1:31pm EDT

U.S. Speaker of the House Nancy Pelosi attends a news conference in Rome February 17, 2009. REUTERS/Alessia Pierdomenico

U.S. Speaker of the House Nancy Pelosi attends a news conference in Rome February 17, 2009.

Credit: Reuters/Alessia Pierdomenico

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WASHINGTON (Reuters) - U.S. House of Representatives Speaker Nancy Pelosi poured cold water on the idea of another economic stimulus package on Thursday amid suggestions that some Democrats had already begun work on one.

The top House Democrat said she first wanted to see how the $787 billion stimulus would help the ailing economy, and that additional legislation like the newly enacted $410 billion spending bill and other advancing measures would also help.

"I really would like to focus on the first one," Pelosi told reporters. "I think it's important that the American people and the Congress of the United States have confidence in the recovery package that we have passed."

Democrats heard diverging opinions from economists this week on whether another massive injection of federal dollars would be needed to pull the U.S. economy out of its downward spiral.

Speculation built when House Appropriations Chairman David Obey told CNN he was beginning to work on a package.

President Barack Obama has forecast that the stimulus package would create or save some 3.5 million jobs over two years, when a large majority of the package would be spent, although some economists have questioned that figure.

Pelosi left the door open to a second stimulus package.

"I don't think you ever close the door to being prepared for what eventuality may come, but I think that is not a near, near thing," she said. "It's just not something that, right now, is in the cards."

Republicans have pounced on the idea of a second stimulus, saying there has already been too much government spending in the first weeks of the Obama administration.

"My members are highly skeptical that we can spend our way out of this particular problem," Senate Minority Leader Mitch McConnell said on Wednesday.

But some others disagree. C. Fred Bergsten, a former assistant secretary of the Treasury, said there was a consensus that all major countries should undertake fiscal stimulus programs equal to 2 percent of GDP for each of the next two years, but "That's not enough."

"That goal was set several months ago ... and the global outlook is much worse than we thought at that time," he told the House Foreign Affairs subcommittee on trade.

Bergsten proposed that the G20 summit of industrialized and developing countries in London in two weeks commit to adopt fiscal stimulus programs, equal to about 3 percent each of their GDP for each of the next 2 years.

"That would require additional stimulus measures, even here in the U.S. and China, which have so far taken the lead," he said, adding that it would also require "lots more" stimulus in Europe and emerging markets.

"But without that we are not going to get anything like the needed recovery," Bergsten told the committee.

(Additional reporting by Susan Cornwell, editing by Patricia Zengerle)

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