http://www.bloomberg.com/apps/news?pid= ... =worldwideDemocrats Are Weighing More Tax Rebates, Pelosi Says (Update2)
By Laura Litvan
July 15 (Bloomberg) -- House Democrats, concerned that rising energy prices will erase the benefit of the tax rebates sent to more than 100 million households this year, said they are weighing plans for a second economic stimulus proposal.
``We will be proceeding with another stimulus package, and we once again hope we will work in a bipartisan way,'' House Speaker Nancy Pelosi said after House Democratic leaders met with a group of economists to discuss the spreading housing crisis and rising gas prices.
Pelosi and other House Democrats said a second stimulus package would probably include more spending for roads and other infrastructure, expanded unemployment benefits, home-heating assistance for low-income families and some aid for states struggling with budget deficits.
Plans for the stimulus legislation are taking shape as Democrats are also racing to approve the Bush administration's proposed rescue plan for Fannie Mae and Freddie Mac by early next week.
Bush said today he would prefer to wait to see how the $168 billion economic stimulus measure passed in February affects the economy. ``We're always open minded to things, but we'll see how this one works,'' Bush said.
His wait-and-see approach got a boost from Federal Reserve Chairman Ben S. Bernanke, who testified to the Senate Banking Committee.
`The First Round'
``On a second stimulus package, my own sense is that we are still trying to assess the effects of the first round,'' Bernanke told the Senate Banking Committee today. ``It appears that it does seem to be helping, but it might be yet a bit more time before we fully understand the extent to which additional stimulus may or may not be needed.''
Bernanke said any added stimulus should have an immediate effect on the economy rather than result in extended spending or tax policies.
Rebate checks, with up to $600 for individuals, are being sent to 111 million households as part of the earlier stimulus package.
Offering the rebates boosts Democratic efforts to showcase their economic credentials in an election. Still, it won't be clear until after a monthlong August recess whether enough Republicans will join with Democrats to actually clear stimulus legislation, said Charles Gabriel, managing director of Capital Alpha Partners.
`Smart Politics'
``It's smart politics, mostly politics,'' Gabriel said in an interview. ``We won't know until after the August recess whether it gains traction.''
Alan Blinder, a former vice chairman of the Federal Reserve and a Princeton University economist who attended the meeting with the Democrats, said that the impact of the earlier round of tax rebates has been ``swallowed up'' by rising energy prices.
Former Treasury Secretary Larry Summers, who also attended the meeting, said the federal government is ``in much more danger of responding inefficiently than in responding excessively.''
Alan Sinai, chief global economist at Decision Economics Inc., said the U.S. economy ``is in a recession that is probably getting worse.''
To contact the reporter on this story: Laura Litvan in Washington at llitvan@bloomberg.net
Last Updated: July 15, 2008 16:57 EDT
Dems called Bush an idiot for doing the very same thing months ago. Strange. Makes one wonder if the things these politicians say are not meant, but are designed to rally a base of voters and sway them to or against a person or party.
You need to change your name now, so my EQ1 bard stops getting your cyber tells!