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Bush cool to second stimulus plan that states want
February 25, 2008 / 10:02 PM / 10 years ago

Bush cool to second stimulus plan that states want

WASHINGTON (Reuters) - U.S. President George W. Bush believes it is too early to decide whether a second economic stimulus package is needed to ward off a recession but would not rule it out, governors who met with him said on Monday.

<p>U.S. President George W. Bush makes remarks on the independence of Kosovo in Dar es Salaam, Tanzania, February 19, 2008. REUTERS/Jim Young</p>

After a $152 billion package was signed into law earlier this month, U.S. governors during a White House meeting pressed Bush to back another stimulus plan that would include funding for roads, bridges and other infrastructure projects.

They argued that such a program would address unemployment and put the economy on a more sustainable path of growth.

“We suggested a $12 billion infusion into the states, for water projects, for roads, for bridges; again, to build our economy for the future but to put people to work today,” Washington Gov. Christine Gregoire, a Democrat, told a news conference.

“I think I can summarize his remarks best by saying he didn’t think he would be interested,” she said.

Iowa Gov. Chet Culver, also a Democrat, said his state has 50 or more infrastructure projects the state could begin working on in 30 to 90 days, if only the federal government would provide matching funds.

Concerns about a recession have grown in U.S. states, with 21 states projecting budget gaps, the liberal-leaning Center on Budget Policy and Priorities reported on Monday.

As economists poured more cold water on the state of the U.S. economy, governors acknowledged that they received an unenthusiastic reception to the idea of a second stimulus shot and the White House said they wanted the first package to have time to work.

PRESIDENTS SAYS ‘PREMATURE’

“The president said it would be premature, he didn’t rule it out, but he also did not embrace the idea of what that would look like and what the contents would be,” Minnesota Republican Gov. Tim Pawlenty said at the White House after the meeting.

To head off a recession, Bush signed into law earlier this month legislation offering tax incentives for businesses to invest in new equipment as well as sending out rebate checks worth up to $600 per individual and $1,200 per family.

“The president ... had an open mind when he listened to them, but he did say he was very concerned about any proposal that would raise taxes,” White House spokeswoman Dana Perino told reporters after the meeting.

She questioned whether the infrastructure projects would help the economy in the short term and instead pointed to $152 billion package approved already. “We think that that was sufficient,” Perino said.

Talk of a second stimulus package comes as economic prognosticators offered a dimmer outlook for the first half of this year and prospects for a recession.

The National Association for Business Economics released a new survey that found 45 percent of economists surveyed believed that a recession will have occurred by the end of the year, while 55 percent said a downturn would be relatively mild.

They forecast 2008 gross domestic product to expand by 1.8 percent, down significantly from the 2.6 percent growth projected in the survey taken in November.

Editing by Cynthia Osterman

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