In a report delivered by Fed Reserve Chairman Ben Bernanke stated that an addition program of government spending would be required to keep the US economy moving through a longer period of low growth. Bernanke suggested to a congressional panel that, “With the economy likely to be weak for several quarters, and with some risk of a protracted slowdown, consideration of a fiscal package by the Congress at this juncture seems appropriate.”
This statement is the first specific support that Bernanke has offered to what would be the second major economic stimulus package. During the past summer, the Federal government had distributed approximately $100 dollars in the form of tax rebate checks to millions of American households. This was an effort to get the economy moving again, even before the serious market plunges and credit crises of the last month.
The word from Bush Administration spokesmen seem to indicate growing support for an additional stimulus package, depending upon what form a proposed package may take. Bernanke and others would be consulted before any measures were approved.
Over the last few months, Democrats in the Congress have been rallying behind a dynamic stimulus package that not only includes measures to strengthen local investment and create jobs but also deal with the country’s serious infrastructure issues. Tens of billions of dollars in spending has been considered for this proposal.
According to House Speaker Nancy Pelosi, a series of meetings would be held in upcoming weeks to determine both the size and structure of the secondary stimulus package. Pelosi stated that the new proposal would be larger than a $61 billion plan that received House approval last month.
While there are some indications that the proposal and passage of a new stimulus package would wait until next year, a Democratic win in November could mean a quicker response. There would be nothing to stop a session post election to propose the new stimulus program.
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