The Rate Cut Stimulates Work On The Fiscal Stimulus Package
Tuesday, January 22, 2008SUSIE GHARIB: That emergency rate cut by the Fed turns up the heat on lawmakers in Washington to enact a fiscal stimulus package quickly. President Bush said late today he's optimistic that Democrats and Republicans can agree on a way to keep the U.S. economy from sliding into recession. Stephanie Dhue looks at the politics involved in putting together a plan.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Timely in Washington is much slower than it is for financial markets. Meeting with congressional leaders, President Bush says he's optimistic they can reach a deal on a fiscal stimulus plan, but he cautioned it will take time.
GEORGE W. B BUSH, PRESIDENT OF THE UNITED STATES: Everybody wants to get something done quickly, but we want to make sure it's done right and make sure everybody is realistic about the timetable. Legislative bodies don't move necessarily in an orderly, quick way and therefore these leaders are committed and they want to get something done. And we want to make sure we are realistic about how fast that can possibly happen.
DHUE: Senate Majority Leader Harry Reid defines quickly as the next three weeks.
SEN. HARRY REID, MAJORITY LEADER: Our goal is to do it before we break for the president's day recess to have something on the president's desk.
DHUE: While there is broad agreement for a plan, the details are still being hammered out. The White House says the $150 billion figure it suggested last week is a starting point. Already, many Democrats are pushing for increased spending on targeted programs, like road surfacing projects, food stamps and unemployment benefits, while many Republicans are stressing tax cuts for businesses, including for R&D. The centerpiece of a stimulus plan will be tax rebates that get money into the hands of consumers. But that, too, will take time. The IRS needs a couple of months to get checks out once a plan is passed. Peter Orszag, who heads the Congressional Budget Office, told lawmakers it will take another six months for those tax rebate checks to factor into the economy.
PETER ORSZAG, DIRECTOR, CONGRESSIONAL BUDGET OFFICE: So, if the checks go out the door in June and July, you're affecting Christmas spending in 2008, at most affecting Christmas spending in 2008.
DHUE: Lehman Brothers political strategist Chuck Marr says the call for a stimulus is so strong, any dissenting voices will get drowned out.
CHUCK MARR, POLITICAL STRATEGIST, LEHMAN BROTHERS: Both sides see it's in their political interest to do something, and I don't think that's going to change; neither is going to want to take the heat for having this fall apart.
DHUE: With political momentum behind a stimulus bill, just about every lobbyist in town is figuring out how to add their agenda items to the legislation. But congressional leaders have put out the word out they want to keep the stimulus bill simple. Stephanie Dhue, NIGHTLY BUSINESS REPORT, Washington.
