President Bush on Friday proposed a shot in the arm for a slowing but fundamentally strong U.S. economy in the form of a broad-based, temporary economic stimulus package worth up to $150 billion that would provide tax incentives for businesses and tax rebates for individuals.
The proposal presented in a speech at the White House was made after weeks of discussions between the president's economic team and U.S. lawmakers. The package, which would boost business investment and consumer spending, could create up to half a million jobs this year, according to U.S. Treasury Secretary Henry Paulson.
Bush began by saying that while the economy has a solid foundation there are areas of concern. He noted the declining housing market, slower job creation and the rising cost of oil. He also mentioned there exists the risk of a downturn.
We're in the midst of a challenging period, and I know Americans are concerned about our economic future, Bush said. But our economy has seen challenging times before -- and it is resilient.
He said that as the U.S. Congress considers an economic package it must make sure it is big enough to make a difference. He said that it should be about 1 percent of the nation's Gross Domestic Product.
I believe there is enough broad consensus that we can come up with a package that can be approved with bipartisan support, Bush said.
He charged Paulson to take the lead in reaching an agreement with Congress. Paulson told reporters after the President's speech that he estimated the package should be between $140 billion and $150 billion.
Bush, who must sign off on any bill once it has been discussed and passed by lawmakers in Washington, proposed several guidelines. He said the package should include broad-based tax relief, be temporary and take effect right away.
Paulson said he was encouraged by the response of Congress and wanted the package approved as soon as possible, however he did not expect approval within weeks.
I'm trying to focus on the positive, and the positive is, we've got broad consensus in Congress we need to do something, and so now we need to turn that into the reality of legislation, Paulson said. 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.
Bush said American businesses, including small businesses, should get tax incentives. He also called income tax relief, saying taxpayers could use the money to use for any necessities they deemed fit.
When questioned about the size of tax rebates for individuals, Paulson would not specify, confirming nothing had been decided. He added that discussions with lawmakers must be collaborative.