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Bush Calls For $150 Billion Economic Stimulus Package

President Bush Friday proposed a $150 billion economic stimulus package to address the nation's mounting economic woes. NewsHour correspondent Kwame Holman reports on the announcement, then the NewsHour listens to the analysis of Brooks and Shields.

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  • JIM LEHRER:

    The Bush plan for boosting the economy, NewsHour correspondent Kwame Holman reports.

  • KWAME HOLMAN:

    The fast-moving train toward an economic stimulus package picked up steam this morning, as the president outlined his proposal in the Roosevelt Room of the White House.

    GEORGE W. BUSH, President of the United States: By passing an effective growth package quickly, we can provide a shot in the arm to keep a fundamentally strong economy healthy. And it will help keep economic sectors that are going through adjustments, such as the housing market, from adversely affecting other parts of our economy.

    This growth package must be temporary and take effect right away so we can get help to our economy when it needs it most. And this growth package must not include any tax increases.

    Specifically, this growth package should bolster both business investment and consumer spending, which are critical to economic growth. Giving them an incentive to invest now will encourage business owners to expand their operations, create new jobs, and inject new energy into our economy in the process.

    To be effective, a growth package must also include direct and rapid income tax relief for the American people. Americans could use this money as they see fit, to help meet their monthly bills, cover higher costs at the gas pump, or pay for other basic necessities.

  • KWAME HOLMAN:

    Minutes later, Treasury Secretary Henry Paulson said the package could cost between $140 billion and $150 billion and create half a million new jobs. He said it needed to be enacted quickly.

  • HENRY PAULSON, U.S. Treasury Secretary:

    We've got broad consensus in Congress we need to do something, so now we need to turn that into the reality of legislation. And then, I can tell you, when we get the legislation, we're going to run like a bunny here to get the relief out.

  • KWAME HOLMAN:

    Edward Lazear, chairman of the President's Council of Economic Advisers, added the administration does not believe it's too late for an economic stimulus plan to help prevent a genuine recession.

    EDWARD LAZEAR, Chair, Council of Economic Advisers: We are still at 5 percent unemployment; 5 percent unemployment is below the average for the last three decades. We don't want to talk down the economy and make it sound worse than it is.

    It is still a relatively healthy economy. We want to keep it that way, and that's the reason that we're moving in this direction.

  • KWAME HOLMAN:

    The administration officials said they prefer to leave it to Congress to settle on the details of the economic plan.

    A 2001 stimulus plan gave individual taxpayers refunds of $300 and $600 for households. This time, refunds reportedly could reach $800 for low- and moderate-income individuals and $1,600 for households.

    Congressional leaders also are working urgently on a stimulus package, and across party lines. Majority Democrats, however, emphasized measures targeting lower income Americans, such as increasing spending on food stamps.

    Secretary Paulson said the administration's focus is on speed and simplicity.

  • HENRY PAULSON:

    We've looked at a lot of things. We believe that there's a great benefit to being simple. You know, the Christmas season has come and gone. We're not trying to decorate a Christmas tree here, that a huge part of this is going to be speed.

  • KWAME HOLMAN:

    Senate Democrat Chuck Schumer, chairman of the Joint Economic Committee, said today he's optimistic.

    SEN. CHUCK SCHUMER (D), New York: I am gratified. I have seen an unusual amount of desire to cooperate on this issue, on both sides of the aisle and at both sides of Pennsylvania Avenue. So I think there's an understanding of urgency.

    And if you talk to Chairman Bernanke, speed is of the essence. If we're to twiddle our thumbs and wait until May or June, it may be too late. I think, if we avoid any of the ideological fights, we could actually pass something so that it would take effect by March 1st.

  • KWAME HOLMAN:

    Congressional leaders say a bipartisan package could be presented ahead of the president's State of the Union address January 28th.