Transcripts

The New Economic Recovery Plan May Be Too Little Too Late

SUSIE GHARIB: Most analysts agree that difficult year will be much worse without the economic recovery package that's now making its way through Congress. But as more companies like GE express concerns about 2009, there are new questions about the best way to get the economy moving again. As Darren Gersh reports in our continuing look at reviving the economy, many are beginning to wonder whether the stimulus package should be growing.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: In addition to his daily intelligence briefing, the president now gets a daily economic briefing. And it's a toss up as to which is scarier.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Frankly, the news has not been good. Each day brings I think greater focus on the problems we're having, not only in terms of jobs loss, but also in terms of some of the instabilities in the financial system.

GERSH: Many economists are seeing the same thing. They're watching Americans ramp up their savings and push down their spending at a record- setting pace. They're watching businesses cut output and slash payrolls. And increasingly these economists are coming to the same conclusion: the economy needs more, not less stimulus. Mark Zandi at Moody'seconomy.com figures the package should be as high as $1.2 trillion. Economists at Goldman Sachs agree, but tack on another $800 billion to help out between 2011 and 2013. Nobel laureate and columnist Paul Krugman has suggested Congress could double its $825 billion package. As House Speaker Nancy Pelosi left a bipartisan meeting with President Obama, I asked her if a bigger package was needed. She said the $825 billion plan was the bigger package.

REP. NANCY PELOSI, HOUSE SPEAKER: It's not just about how big the package is, it's about how fast jobs are created and how those initiatives that will be added in the spending will contribute to the long term stabilization of our economy.

GERSH: Republicans remain concerned the increased spending is going to fund Democratic pet projects and House Minority Leader John Boehner says, if anything, the package is now too big.

REP. JOHN BOEHNER, MINORITY LEADER: At the end of the day this is not our money to spend. We're borrowing this money from our kids and so we have to find a package that's the right size. You know, if we've got to come back and revisit this later this year or next year, we can deal with that at that time.

GERSH: Republicans want to see more tax cuts added to the program, though congressional tax writers say the earliest the Treasury could adjust tax withholding tables is June. And economists at Macroeconomic Advisers believe families would save roughly $0.40 out of every dollar they receive in tax cuts as consumers struggle with the deep recession. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.