Stimulus Price Tag: $150 Billion

Jan 19, 11:04 PM

WASHINGTON (AP) - President Bush embraced as much as $150 billion in tax relief on Friday to jump start the lackluster economy. If Congress passes an economic stimulus package, the country will be "just fine," he said.

Bush said in a White House announcement that such a growth package must include tax incentives for business investment and quick tax relief for individuals. To be effective, he said an economic stimulus package would need to roughly represent 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.

Later, visiting a manufacturing plant in Frederick, Md., about 50 miles north of Washington, Bush said: "We need to get this deal done and get it out."

"I believe we can come together on a growth package very quickly," the president said. Earlier, he had said, "There is a risk of a downturn."

Treasury Secretary Henry Paulson said 1 percent of GDP would equate to $140 billion to $150 billion, which is along the lines of 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, said Bush was hoping to target about $100 billion toward individuals and about $50 billion toward businesses.

"The cost of not acting has become too high," Paulson said. "We must act now."

While Bush focused solely on taxes, Democratic and Republican leaders in Congress have been working on a broader package that also would include a temporary increase in food stamps and an extension of and perhaps increase in unemployment benefits.

The president and Congress are scrambling to take action as fears mount that a severe housing slump and painful credit crisis could cause people to close their wallets and businesses to put a lid on hiring, throwing the nation into its first recession since 2001.

Specifically, Bush called for tax incentives for businesses, including small companies, to make new and major investments this year. "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," Bush said.

He also called for tax relief for individuals - probably to come in the form of one-time rebates. But he did not say what size checks Americans would get or the amount of other tax incentives that could be in the package. Nor did Bush detail how the nation would pay for such a plan.

House Speaker Nancy Pelosi, D-Calif., has talked of a package totaling $100 billion or more. House Republican leader John Boehner of Ohio spoke of a bill in the range of $100 billion to $150 billion. Aides have said Bush does not believe the stimulus spending should be offset - or paid for - by any tax or spending changes elsewhere. Some deficit hawks want this but it isn't expected to be part of any package.

(c) 2008 Telegraph - Herald (Dubuque). Provided by ProQuest Information and Learning. All rights Reserved. Stimulus Price Tag: $150 Billion
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