The Associated Press
WASHINGTON — With recession fears rising and the stock market tumbling, President Bush on Friday called for up to $150 billion in tax relief for consumers and business — and said there was no time to waste.
Bush’s urgent remarks gave fresh impetus to congressional leaders already hard at work on an economic rescue package that would include extra money for food stamps and jobless benefits in addition to tax rebates of hundreds of dollars each for millions of Americans. The hope is that people would immediately spend those rebates and give the economy a badly needed boost.
“I believe we can come together on a growth package very quickly, and we’re going to need to,” Bush said.
Wall Street remained skeptical. The Dow Jones industrial average dropped 59.91 points after plummeting 306 points a day earlier.
Bush said the rescue effort should be both quick and temporary, a one-time boost for a national economy that is in danger of sliding into the first recession since 2001 if it hasn’t already edged across that line. The president’s tone was somber in his remarks at the White House, but his mood was upbeat later in the day when he visited a factory to underscore his focus on the economy.
“Crank this sucker up,” he exclaimed, an exhortation that could fit his hopes for economic revival, though he was referring specifically to a huge riding mower at Wright Manufacturing. Once the engine was roaring, Bush jumped on and steered the mower playfully.
Despite darkening economic reports, he said that if Congress passes a quick federal relief package, “We’re gonna be just fine.”
At the White House earlier, Bush avoided the word “recession” but acknowledged the economy was severely strained by the long housing slump and high oil prices.
“There is a risk of a downturn,” Bush said.
For a stimulus package to have much impact, he said it would need to represent roughly 1 percent of the gross domestic product, or about $140 billion to $150 billion.
On Capitol Hill, Democratic leaders pledged to cooperate with Bush and congressional Republicans. Senate Majority Leader Harry Reid, D-Nev., had criticized Bush on Thursday for deciding to speak publicly on the package before a deal had been struck, but Reid said Friday he was encouraged by the president’s remarks.
Some Democrats, though, said they were disappointed that Bush had focused only on taxes.
“We want a balanced package of tax rebates for the middle class and spending stimuli that jump-start the economy quickly. The president has included one; he also needs the other to quickly improve our economy,” said Charles Schumer, D-N.Y.
Sen. Edward M. Kennedy, D-Mass., said that “we cannot forget that any effective stimulus plan must start and end with America’s working families. The people who are struggling every day to pay their bills, heat their homes, and pay their mortgages need our help now, and helping them is the best way to be certain that any stimulus goes directly into the economy.”
Signaling a willingness to cooperate, Rep. Barney Frank, D-Mass., was to say in the Democrats’ Saturday radio address: “Democrats stand ready to work with the president and congressional Republicans to put together a bipartisan package including tax rebates for most Americans,and one-time increases in programs directed at those who are bearing the heaviest burdens in this economy.”
Treasury Secretary Henry Paulson said the administration was being intentionally vague so as not to taint negotiations with lawmakers, but he spoke with vigor about fast action.
“When we get the legislation, we’re going to run like a bunny here to get the relief out,” he said.
Paulson said business incentives the administration envisions would help companies invest, expand and hire more workers. The White House estimates that a stimulus in the range of what Bush wants could create 500,000 additional jobs this year.
“We need to get this deal done and get it out and get money in the hands of our consumers and small business owners.”
Democratic congressional leaders agree that tax relief should be in the package. Lawmakers are considering tax breaks for businesses investing in new equipment and a $500 rebate for individuals, said congressional aides involved in the talks. Details for couples and people with children are still being negotiated.
Senior aides to House Democrats and Republicans, however, said the measure also could contain increases for food stamps, and higher unemployment benefits.
“Democrats welcome President Bush’s willingness to work together with Congress to provide urgent relief to the millions of Americans facing economic hardships,” House Speaker Nancy Pelosi, D-Calif., said, adding that the two parties would “work together on the details of a stimulus package.”
Bush has gone down the tax rebate road before. Back in 2001, he added refunds of up to $300 per individual and $600 per household as a recession-fighting element of the tax cut plan that had been the centerpiece of his 2000 campaign.