Olivier Knox / AFP
Washington: President George W. Bush and top lawmakers agreed Tuesday, 22 January, on the need to quickly approve an economic stimulus package to quiet recession fears that have sent global financial markets into freefall.
Congressional leaders emerged from crisis talks at the White House saying they hoped to pass, within three to four weeks, a plan for priming the sputtering US economy with an infusion of roughly $140-150 billion.
“I’m confident that we can get an agreement passed, and we can get an agreement passed in relatively short order,” Bush said after meeting with lawmakers and Treasury Secretary Henry Paulson, his lead negotiator.
“All of us understand that we need to work together. All of us understand that we need to do something that’ll be effective. And all of us understand that now’s the time to work together to get a package done,” said Bush.
“This week’s downturn in the global markets demonstrates how urgently we need to act to revive our nation’s faltering economy,” Senate Democratic Majority Leader Harry Reid said in a statement.
“I am hopeful that we will be able to reach agreement on a bipartisan stimulus package soon,” he said, adding that the plan should be “timely, temporary and targeted to those who need it most.”
House Republican Minority Leader John Boehner told reporters that “there are no issues of disagreement right now” between the major parties — though all sides have been stingy with making any specific proposals in public.
“Our definition of ‘soon’, obviously, is in the next few weeks,” said Senate Republican Minority Leader Mitch McConnell, who cited the week of 18 February as a target date. “That, by the standards in Congress, is pretty fast.”
The White House said Bush might accept, but was not pushing a stimulus package with a price-tag greater than 1% of US GDP, or roughly $140-150 billion.
Asked about that number, Boehner replied that “everybody is pretty well focused in on that, should be about the size,” but cautioned that size and scope would be determined in upcoming negotiations.
“We want to make sure it is done right, and make sure that everybody’s realistic about a timetable. Legislative bodies don’t move, you know, necessarily in an orderly, quick way,” Bush said as he met with the leaders.
“I believe we can find common ground to get something done that’s big enough and effective enough so that an economy that is inherently strong gets a boost,” he said.
Bush, who faced pressure from hard-hit global financial markets, overseas economic partners, and presidential election-year politics, has refused to diagnose a recession in the world’s richest economy.
“This is a flexible, this is a resilient, this is a dynamic economy, and the entrepreneurial spirit is high. But there is some uncertainty that we’re going to have to deal with,” he said.
“We are not forecasting a recession, but clearly there is a slowdown,” Bush spokeswoman Dana Perino said after the Federal Reserve slashed its key interest rate by an unprecedented three-fourths of a point.
The 75 basis-point point cut marks the largest reduction in the federal funds rate which has been used by the Fed since the early 1990s as its main monetary policy lever.
The rate cut was approved by the Federal Open Market Committee (FOMC) presided over by Fed chairman Ben Bernanke, with one dissenting vote, and won a sigh of relief of sorts at the White House.
“I’m not going to comment on the markets or on the monetary policy that is set by the Fed. We have absolute confidence in Chairman Bernanke and the Fed’s decisions,” said Perino.
Fears about the trillion-dollar US financial system have spiked in recent weeks as big US and foreign banks have announced billions of dollars in losses, mainly tied to stricken US mortgage investments.