January 18, 2008 / 12:31 AM / 10 years ago

President Bush to offer views on economic package

4 Min Read

<p>President Bush speaks via conference call from the Oval Office as Treasury Secretary Henry Paulson looks on, January 17, 2008.Joyce N. Boghosian/The White House/Handout</p>

WASHINGTON (Reuters) - President George W. Bush will offer ideas on Friday for shoring up the fragile U.S. economy, as he and the Democratic-led Congress move forward with talks on a plan to avert a recession.

A consensus has emerged on the need for a rescue plan for an economy hit hard by a housing crisis, credit crunch and surge in oil prices. But the details have yet to be worked out.

A package totaling up to $150 billion is under discussion between the White House and Capitol Hill, according to sources familiar with the matter who spoke on condition of anonymity. Under consideration are tax breaks for families and companies and spending to help low-income people weather the downturn.

Bush is to speak in only general terms about what type of fiscal stimulus package he would like to see, as he makes remarks at the White House on the economy on Friday at 11:50 a.m. EST.

In a sign the Bush administration is trying to show how focused it is on the issue, Treasury Secretary Henry Paulson appeared on three television shows on Friday morning and said he has found broad agreement with congressional Democrats and Republicans that something needs to be done, and quickly.

"The long-term fundamentals of our economy are strong," he said on the NBC network. "We believe the economy is going to continue to grow slowly here, but it has slowed down and the risks are to the downside and the president is very focused on taking actions quickly that will give a boost to our economy as soon as possible this year."

Campaign Trail

The debate over a stimulus package has roiled the campaign trail, where candidates are vying to succeed Bush in the November 4 election.

All three major Democratic candidates -- Sen. Hillary Clinton, Sen. Barack Obama and former Sen. John Edwards -- have offered plans with spending and tax-cut ideas.

Republican Sen. John McCain on Thursday laid out a proposal for cuts in corporate tax rates and incentives for companies to invest in new equipment and research. One of his main Republican rivals, former Massachusetts Gov. Mitt Romney, is also getting set to unveil a plan.

Later on Friday Bush was to visit a factory in Maryland and discuss the economy further. White House spokesman Tony Fratto said Bush planned to talk about the "kinds of policies that he thinks will provide temporary, effective measures to increase growth over the short term."

Lending momentum to the efforts to seek a deal, Ben Bernanke, the powerful chairman of the Federal Reserve, on Thursday threw his heft behind the idea of fiscal stimulus.

Bernanke told a congressional hearing that any measure should be designed to kick in quickly.

Bleak reports this week on retail sales and the troubled housing sector have reinforced economic concerns.

On Wall Street, stocks were set to open higher after IBM forecast higher-than-expected profits and General Electric Co. posted earnings that met expectations. Stocks had plunged 307 points on Thursday amid the recession fears.

Lawmakers and White House officials agreed with Bernanke that time was of the essence.

"In the next few days, through ongoing bipartisan negotiations, we are hopeful that we will agree on legislation that provides timely, targeted, and temporary assistance to America's middle class," said House of Representatives Speaker Nancy Pelosi, a California Democrat.

Fratto said there seemed to be urgency among both Republicans and Democrats to work out an agreement.

"We do want to try to pass something quickly," he said.

Bitter fights over domestic spending and the Iraq war marked relations between Bush and the Congress last year, making many analysts initially skeptical that the two sides could come together on a fiscal stimulus plan.

But with many private analysts saying the economy might already be in a recession, neither the White House nor Congress wants to be blamed for inaction.

(Additional reporting by Donna Smith and Glenn Somerville)

Reporting by Caren Bohan; Editing by Patricia Zengerle

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