Echoing Federal Reserve chairman Ben Bernanke's calls Thursday for swift economic relief, Bush embraced a stimulus package of roughly 1 percent of the gross domestic product -- the value of all U.S. goods and services and the best measure of the country's economic standing.
"There is a risk of a downturn," the president said in his remarks at the White House.
Speaking for about seven minutes, Bush called passing a growth package "our most pressing economic priority," the Associated Press reported. But he also used the announcement to defend his tax cuts, which will expire unless renewed by the Democratic-led Congress.
Bush said he wanted Congress to move quickly on a stimulus package that would focus on tax rebates for families and incentives for new business investment. The White House said the package could create about 500,000 new jobs, according to Reuters.
Treasury Secretary Henry Paulson said 1 percent of GDP would equate to $140 billion to $150 billion, which is close to what private economists say should be sufficient to help give the economy a short-term boost.
Paulson said the largest part of the stimulus package would be targeted to individual taxpayers. One Republican official, speaking on condition of anonymity, told the AP that Bush was hoping to target about $100 billion toward individuals and about $50 billion toward businesses.
Economists said a reasonable range for tax cuts in the new package might be $500 to $1,000. A White House plan is looking at rebates of up to $800 for individuals and $1,600 for married couples.
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 formed the centerpiece of his 2000 campaign.
The president and Congress are scrambling to take action as fears mount that a severe housing slump and credit crisis could cause people to close their wallets and businesses to put a lid on hiring, throwing the nation into a recession.
But despite Bush's announcement, U.S. stocks fell Friday on concerns that the White House effort to boost the economy would not be enough to forestall a recession.
Financial and telecommunications companies were among the top declining sectors on the S&P 500, wiping out earlier gains on optimism about earnings from bellwethers IBM and General Electric Co.
"At first blush it appears it is a little less dramatic than people were hoping for," Peter Kenny, managing director of Knight Equity Markets, Jersey City, N.J., told Reuters.
"Uncertainty is primarily the reason why the market has gone lower. The market is hoping for help both fiscally and monetarily that it can qualify as likely to have a real impact," he said.
James W. Paulsen, a strategist at Wells Capital Management, reflected the view of many investors that help from Washington would come too late.
"By the time they actually pass anything, it will be past the time we need it," Paulsen said to the New York Times.