January 16, 2008

Pelosi and Bernanke to discuss economy: aide

WASHINGTON (Reuters) - Federal Reserve Chairmen Ben Bernanke will meet on Monday with House of Representatives Speaker Nancy Pelosi to discuss how they can work together to boost the U.S. economy, a spokesman for Pelosi said.

Falling home values, higher oil prices and a decline in the stock market have raised concerns that the United States could slip into recession this year.

Pelosi will meet one-on-one with Bernanke to get his views on what steps Congress should take, as well as to let him know what ideas Democratic leaders are considering, Pelosi spokesman Brendan Daly said on Saturday.

It will be a "mutual exchange," Daly said.

Bernanke, who earlier this week sent a strong signal that the Fed was prepared to cut interest rates further to spur growth, also will speak to House Democrats at their policy retreat later this month, Daly said.

Many prominent economists believe Congress should supplement any Federal Reserve action with a temporary fiscal stimulus package that could include tax breaks.

Pelosi and Senate Majority Leader Henry Reid have asked to discuss the issue with President George W. Bush soon after he returns on Wednesday from a trip to the Middle East.

Treasury Secretary Henry Paulson said late on Friday that Bush still had not decided whether a stimulus package was needed. But Paulson's other remarks left little doubt the White House was mulling such measures.

"Time will be of the essence," Paulson said on Bloomberg Television's "Political Capital with Al Hunt" program. "so I think we want to do something as quickly as possible if we do it. ... It's going to be easier get something done on a temporary basis."

The New York Times reported on Saturday that Bush could unveil his ideas to stimulate the economy, most likely in the form of tax relief, in his State of the Union speech to Congress on January 28.

No comments: