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Bush, Bernanke back package to stimulate weakening economy
Thursday, January 17, 2008 | 1 comment(s)
WASHINGTON (AP) — President Bush and Federal Reserve Chairman Ben Bernanke today embraced calls for an economic stimulus package to avert recession. Bernanke said such a plan should be quickly implemented and temporary so that it won’t complicate longer-term fiscal challenges.
The Fed chief, in testimony prepared for the House Budget Committee, did not embrace any specific provisions or a specific plan. Rather, he spoke to the general concept of an economic rescue package. It is likely that any such package would include tax rebates.
“Fiscal action could be helpful in principle” and may provide “broader support for the economy” than the Fed can furnish alone through reductions in interest rates, Bernanke said in prepared testimony to the House Budget Committee. However, “the design and implementation of the fiscal program are critically important,” he said.
“The president does believe that over the short term, to deal with the softening of the economy, that some boost is necessary,” Bush spokesman Tony Fratto said.
Frattro’s comments marked the first White House confirmation that Bush, confronting a deepening economic crises that has shaken much of the nation, supports government intervention. Until now, the White House said the president was just considering some type of short-term boost.
Fratto would not divulge the details or what the stimulus would look like.
Bernanke already had indicated earlier that he was open efforts to develop a rescue package, and reinforced that position today.
The fragile state of the economy has gripped Wall Street and Main Street and is a rising concern among voters. The situation has galvanized politicians — including those vying to be the next president — and poses the biggest test to Bernanke, who took over the Fed nearly two years ago.
With the economy suffering, one of Bush’s first acts after returning to Washington Wednesday evening from the Middle East was to be a conference call today with congressional leaders in both parties to discuss a possible short-term stimulus package.
The Fed chief, in testimony prepared for the House Budget Committee, did not embrace any specific provisions or a specific plan. Rather, he spoke to the general concept of an economic rescue package. It is likely that any such package would include tax rebates.
“Fiscal action could be helpful in principle” and may provide “broader support for the economy” than the Fed can furnish alone through reductions in interest rates, Bernanke said in prepared testimony to the House Budget Committee. However, “the design and implementation of the fiscal program are critically important,” he said.
“The president does believe that over the short term, to deal with the softening of the economy, that some boost is necessary,” Bush spokesman Tony Fratto said.
Frattro’s comments marked the first White House confirmation that Bush, confronting a deepening economic crises that has shaken much of the nation, supports government intervention. Until now, the White House said the president was just considering some type of short-term boost.
Fratto would not divulge the details or what the stimulus would look like.
Bernanke already had indicated earlier that he was open efforts to develop a rescue package, and reinforced that position today.
The fragile state of the economy has gripped Wall Street and Main Street and is a rising concern among voters. The situation has galvanized politicians — including those vying to be the next president — and poses the biggest test to Bernanke, who took over the Fed nearly two years ago.
With the economy suffering, one of Bush’s first acts after returning to Washington Wednesday evening from the Middle East was to be a conference call today with congressional leaders in both parties to discuss a possible short-term stimulus package.
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