President Bush and Federal Reserve Chairman Ben Bernanke on Thursday embraced calls for an economic stimulus package to avert recession. Bernanke said such a plan should be quickly implemented and temporary so that it won't complicate longer-term fiscal challenges.
The Fed chief, in testimony prepared for the House Budget Committee, did not embrace any specific provisions or a specific plan. Rather, he spoke to the general concept of an economic rescue package. It is likely that any such package would include tax rebates.
"Fiscal action could be helpful in principle" and may provide "broader support for the economy" than the Fed can furnish alone through reductions in interest rates, Bernanke said in prepared testimony to the House Budget Committee. However, "the design and implementation of the fiscal program are critically important," he said.
"The president does believe that over the short term, to deal with the softening of the economy, that some boost is necessary," Bush spokesman Tony Fratto said.
On Capitol Hill, Bernanke agreed that "fiscal action could be helpful in principle" and may provide "broader support for the economy" than the Fed can furnish through reductions in interest rates alone. In his testimony for the House Budget Committee, the Fed chief said, "The design and implementation of the fiscal program are critically important."
Bernanke didn't recommend specific provisions or endorse a specific plan, but rather spoke to the general concept of an economic rescue package. It is likely that any package that emerges will include tax rebates.
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