ALEXANDRIA, La. - President George W. Bush is open to a second government stimulus package, the White House said Monday after Federal Reserve Chairman Ben Bernanke told legislators the time was ripe for another "significant" boost to energize the U.S. economy amid the credit crisis.
"We've had an open mind about it, but what we are focused on right now is the urgent need to get this rescue package implemented," White House press secretary Dana Perino told reporters about the US$700 billion government rescue program for the financial system that Congress passed on Oct. 3.
"We're continuing to have conversations with members of Congress and we're open to ideas that they would put forward ... that would stimulate the economy and help us pull out of this downturn faster."
The administration has been cool to Democratic efforts to pass a second stimulus bill because of worries about the impact that additional spending would have on already soaring budget deficits.
Administration officials had said more time was needed to see the impact of the first stimulus bill. Instead, the administration and congressional Republicans have favoured other legislation they say would help the economy -- opening the Outer continental shelf to oil and gas drilling and approving free trade agreements with Panama, Colombia and South Korea.
Perino's statement to reporters travelling with Bush to a round-table with business leaders in central Louisiana took on new importance after Bernanke's comment to the House of Representatives Budget Committee.
"With the economy likely to be weak for several quarters, and with some risk of a protracted slowdown, consideration of a fiscal package by the Congress at this juncture seems appropriate," Bernanke said in his prepared testimony.
Pressed for how large the stimulus package should be, Bernanke demurred, saying that was up to Congress. But he said the size should be "significant."
Bernanke suggested that Congress design the stimulus package so that it will be timely, well targeted and would limit the longer-term affects on the government's budget deficit, which hit a record high in the recently ended budget year.
Bernanke said the package also should include provisions that would help break through the stubborn credit clog that is playing a major role in the economy's slowdown.
House Speaker Nancy Pelosi, meanwhile, called on Bush and congressional Republicans to work with Democrats "to enact a targeted, timely and fiscally responsible economic recovery and job creation package."
She has said an economic recovery bill could be as large as $150 billion. Economists have told leading Democrats the plan should be twice the size.
Perino said Bush's endorsement of any kind of second stimulus would depend on the details of legislation drafted by Congress.
She said the administration had concerns that what's been put forward so far by Democratic leaders in Congress would not energize the economy.
"We'd like to see the details of what would be proposed, because there are several programs that have been recommended that are coming in a cloak of being stimulative, and we don't think that those would actually stimulate the economy," Perino said. "So anything that we would do, we would have to take a careful look at."
Earlier this year, Congress enacted a $168 billion stimulus package that included tax rebates for people and tax breaks for businesses. The rebate cheques of up to $600 per person did help to lift economic growth in the spring.
However, consumers cut back sharply as rising unemployment, harder-to-get credit, shrinking paycheques and falling home values made people much more cautious. In turn, businesses -- worried about customers' flagging appetites -- also have retrenched.
