New economic plan gaining momentum
POSTED: Tuesday, October 21, 2008
WASHINGTON » What's another $150 billion on top of the more than $1 trillion that's already been spent to rescue the sinking economy and financial markets?
Momentum is building for a fresh dose of economic stimulants to boost the country out of the doldrums - perhaps by putting more money in Americans' pockets. The White House said yesterday that President Bush was open to some sort of action after Federal Reserve Chairman Ben Bernanke warned the slump could drag on without it.
Already this year, Congress with Bush's blessing has enacted a $168 billion economic recovery package, a $700 billion financial bailout plan and a $300 billion housing rescue to provide relief. Now there's a push on for another multibillion stimulus effort, sure to push the record federal deficit even higher.
On Wall Street, stocks surged yesterday, with the Dow Jones industrials rising 413.21 points. There also were some new signs that credit conditions were thawing a bit.
The national economy, already wobbling, has been rocked by a trio of hard punches from the housing, credit and financial crises. With a recession widely seen as inevitable, if not already under way, the focus in Washington has shifted to the questions of how bad, how long and how to limit the pain.
There is increasing talk of a post-election special session calling Congress back to the Capitol.
House Speaker Nancy Pelosi of California and fellow congressional Democrats are pushing a package that could cost as much as $150 billion. Some economists, however, have advised them in recent days that to have a real impact, the total would have to be far larger, as much as $300 billion.
As part of that package, Democrats want to resurrect a $61 billion House-passed measure that included about $37 billion in public works spending, $6 billion to extend jobless benefits, $15 billion to help states to pay their Medicaid bills and $3 billion in food stamp assistance for the poor.
The Democrats also are considering a second round of tax rebates to follow the $600 to $1,200 checks most individuals and couples got earlier this year. That money, going directly to consumers in hopes they would spend it, could push the price tag much higher.
The Dow rose 413.21 points, or 4.67 percent, to 9,265.43. The blue chips' gain were in line with a 4.68 percent gain registered Thursday, when the Dow jumped 401 points.
The rally marked the Dow's 23rd triple-digit move in 26 sessions.
Most sessions have brought losses, however, with 11 of the past 14 showing declines.
Broader indexes also rose sharply yesterday. The Standard & Poor's 500 index jumped 44.85, or 4.77 percent, to 985.40. The Nasdaq composite index rose 58.74, or 3.43 percent, to 1,770.03.
Light, sweet crude rose $2.40 to settle at $74.25 a barrel on the New York Mercantile Exchange.