Quick stimulus sought, but what kind?
Speaker of the House Nancy Pelosi (D-Calif.), addresses the media today with, from left, House Majority Whip James Clyburn (D-S.C.), Majority Leader Steny Hoyer (D-Md.), Minority Whip Roy Blunt (R-Mo.), and Minority Leader John Boehner (R-Ohio) after a closed-door meeting at the Capitol in Washington, D.C.
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BOB MOON: Republican and Democratic leaders huddled on Capitol Hill today, and emerged vowing to craft a bipartisan stimulus package. There's no shortage of proposals in Washington to get the economy back on track, but as much as politicians love to spend money and cut taxes, Marketplace's John Dimsdale reports there's a fight over both.
JOHN DIMSDALE: There are proposals to cut individual income taxes and to give businesses extra investment tax credits. Some want the government to offer struggling families cash rebates, or help with heating bills and mortgage payments. Others call for spending on roads and bridges and buildings.
In a report weighing the options, the Congressional Budget Office endorsed Democratic proposals to help low-income workers, such as expanding unemployment benefits and food stamps. CBO said the Republican idea of extending President Bush's tax cuts, due to expire in 2011, wouldn't provide any immediate economic stimulus. Asked about that at a Joint Economic Committee hearing today, former Treasury Secretary Lawrence Summers said making those tax cuts permanent would also add to future deficits.
LAWRENCE SUMMERS: I guess I am very struck by the experience of the 1990s which I think was pretty powerful in demonstrating that putting deficit problems behind us exerted a very potent positive impact on the economy.
Surpluses he said gave individuals and companies confidence, but Pennsylvania Republican Philip English dismissed that in favor of permanent tax cuts as the right stimulus.
PHILIP ENGLISH: I certainly would rather do that, rather than threaten tax increases of historic proportions.
One thing both sides agree on is the need for quick action. CBO concludes that waiting too long for stimulus would be worse than no stimulus at all.
In Washington, I'm John Dimsdale for Marketplace.