An economic stimulus package to help stave off recession is on the fast track in Congress after Democratic and Republican leaders in the House of Representatives on Wednesday reached a rare agreement to quickly pull together a bipartisan plan.
House Speaker Nancy Pelosi, a California Democrat, said she hoped a meeting of congressional leaders with President George W. Bush on Tuesday would pave the way for quick passage of an economic stimulus package.
"We hope to find a common ground and come out of that meeting with a legislative proposal," Pelosi said at a news conference on Wednesday. "There is an urgency to do something and to do something now."
In an effort to get a jump start on the initiative, Bush and congressional leaders scheduled a conference call to discuss a stimulus package on Thursday. Bush is to return to Washington from a Middle East trip late on Wednesday.
A jump in the US jobless rate to a two-year high, falling retail sales and a downturn in factory activity have combined with the housing market's deep slump to stir fears that a six-year expansion may be coming to an end. Some economists warn the economy may already be in recession.
Pelosi discussed prospects of a stimulus on Wednesday with House Republican Leader John Boehner of Ohio who later told reporters there was "an agreement that we will work together to try to bring forward a package that truly is stimulative."
In a sign that lawmakers are serious about working together, Republican leaders no longer were demanding that the stimulus package include a controversial initiative to extend 2001 and 2003 Bush tax cuts that are set to expire in 2010.
House Democratic Leader Steny Hoyer said the whole package could be wrapped up in a month.
"I think it can be done in 30 days," Hoyer said.
Lawmakers are looking at an election-year package of about $100 billion to $125 billion that is likely to include tax rebates of about $250 to $600 to get money quickly into the hands of consumers.
Senator Charles Schumer of New York said on Wednesday that Democrats would outline their plan before then.
"Targeted tax cuts for the middle class and certain spending programmes -- (additional) unemployment insurance, food stamps -- that get into the economy quickly seem to be the center of a developing consensus," Schumer said.
With the November elections looming and public discontent with Congress running high, lawmakers are looking to avoid the kind of partisan rancor that dominated last year's session.
Republicans have said any package should include provisions giving businesses a bigger tax break on new investment purchases.
Schumer said Federal Reserve Chairman Ben Bernanke had told him on Monday that a fiscal stimulus package was needed and should be enacted quickly.
"He said that while he wasn't going to endorse a specific plan, if an economic stimulus package was properly designed and enacted so that it enters the economy quickly, it could have a very positive effect on the economy," Schumer said.
Bernanke testifies to the House Budget Committee on Thursday.
Former US Treasury Secretary Lawrence Summers, who served under President Bill Clinton, told the Joint Economic Committee, chaired by Schumer, that Congress should quickly enact a $50 billion to $75 billion fiscal stimulus of tax rebates and spending.
It should target the middle class and the unemployed, and prepare a "second tranche" of the same size that would be triggered if economic conditions worsen, Summers said. (Reuters)
Follow Emirates 24|7 on Google News.