By Andrew Taylor
Pelosi, D-Calif., is taking the lead as Democrats
controlling Congress have reached out to the White House to work toward an
economic stimulus measure that could get enacted relatively quickly.
"I hope that we can work together - recognizing the
independence of the Fed - and coordinate monetary and fiscal policy that will
soften the blow for hard-working families affected by an economic
slowdown," Pelosi said in a statement released after the meeting.
Bernanke, chairman of the Federal Reserve Board, did not
comment after the meeting and has been circumspect in his public statements
about whether fiscal stimulus such as tax rebates or additional government
spending is needed. He signaled last week that the Fed will continue easing
interest rates in an effort to keep the economy from plunging into a recession.
But he has sounded open to the idea of a stimulus bill,
saying last week that he is interested in seeing "what emerges" and
what options might be put on the table by the White House and Congress.
Behind the scenes, Bernanke has told lawmakers he favors
congressional action to boost the economy, said an aide to a senior lawmaker
who has spoken to the Fed chairman. The aide requested anonymity since the
conversation was confidential.
Bernanke is scheduled to testify Thursday before the House
Budget Committee.
Both Republicans and Democrats are floating ideas about how
to best jump-start the economy, with some polls showing that economic issues
ranking with the war in
Given the difficulties Democrats have had in working with
President Bush, it's not a given that the rivals will be able work out an
agreement on a stimulus package.
For starters, Democrats say they want to include new federal
spending as part of any stimulus bill, floating options such as money for
ailing state governments, higher Medicaid spending and an increase in food
stamp payments.
Both Republican and Democrats are eyeing tax rebate checks
as a way to quickly put money in the hands of consumers, though Democrats are
focusing more on targeting the money to the middle class and possibly to poor
people who may not pay income taxes.
One idea popular inside GOP circles is to restore the bonus
depreciation write-off for big-ticket investments in capital assets and
property.
"The experience with the so-called bonus depreciation
for businesses several years ago is that it provided only a small amount of
stimulus to the economy at best," said Douglas Elmendorf, an economist
with the Brookings Institution at a forum last week.
Clashes are certain along the way as Republicans fight
against social spending and as Democrats express skepticism of business tax
breaks. Still, the pressure to get something passed lends incentive to
compromise, even at the risk of alienating core supporters on the right and
left.
