Bush, lawmakers vow quick action on economy plan

By Caren Bohan and Donna Smith

WASHINGTON (Reuters) - President George W. Bush and leaders of the Democratic-led Congress vowed on Tuesday to move quickly to work out the details of a $150 billion stimulus package for the U.S. economy, as fears of a recession prompted a sell-off in global financial markets.

"I'm confident that we can get an agreement passed, and we can get an agreement passed in relatively short order," Bush said after meeting at the White House with Democratic House of Representatives Speaker Nancy Pelosi and Senate Majority leader Harry Reid.

"All of us want to get something done, all of us want to get something done that will be temporary and effective, and all of us want to get something done as fast as possible," Bush added.

A vicious rout of global stock markets at the start of the week sent the Federal Reserve scrambling to slash U.S. interest rates on Tuesday by three quarters of a point, the largest cut in more than 23 years.

Global equities pulled out of their nose dive after the cut but U.S. stock prices ended the day weaker with the Dow Jones industrial average down 128 points, or just over 1 percent.

It was unclear if the Fed action or the talk of a stimulus package would be enough to stem the turbulence.

"We have an economy sliding toward recession. Hundreds of thousands of families at risk to lose their homes. The price of gas and heat skyrocketing to all-time highs," Reid, a Nevada Democrat, said on the Senate floor before his visit to the White House to meet with Bush.

Later, Reid told reporters he hoped legislation could be finished and ready for Bush's signature by mid-February.

"We talked about doing something as soon as is legislatively possible -- something that is targeted and something that is temporary in order to inject stimulus into the economy," Pelosi, a California Democrat, said as she Reid left the meeting with Bush at the White House.

"Now we see across the world that the state of the economy in the U.S. is having an impact as well. So the urgency we feel at home is now even more urgent as we see the impact of our markets on others." Pelosi said.

The package, which would mark a rare instance of cooperation between Bush and the Democratic lawmakers, is likely to include tax rebates, incentives for business investment and assistance for low-income people who would be hardest hit by the downturn.

But lawmakers are still negotiating the details of who should benefit from the tax rebates and how much of the package should be directed to low income and poor people.

"I expect we'll have a vigorous argument over that issue," said House Republican Leader John Boehner of Ohio, who has been in negotiations with Pelosi on the package.

The president has said he thought a plan worth 1 percent of the economy size, or up to $150 billion, could give the economy a significant lift.

But the White House left the door open to the possibility of a larger package, saying Bush was "not closing any doors."