WASHINGTON – President Bush on Friday urged that an economic stimulus package worth nearly $150 billion be passed immediately to head off a nationwide slump, while expressing confidence that the sagging economy will rebound.
In a well-received address, Bush said the package would consist of income tax relief and tax incentives for businesses, but veered away from specifics. He said it should be temporary and geared to restore money quickly to the pockets of consumers, so they can infuse the economy with new dollars as the housing market slump and other factors put it at risk.
"Passing a new growth package is our most pressing economic priority," Bush said. "We can provide a shot in the arm to keep a fundamentally strong economy healthy ... I’m optimistic about our economic future."
Bush said that to be effective, an economic stimulus package would need to roughly represent 1 percent of the gross domestic product — the value of all U.S. goods and services and the best measure of the country's economic standing.
"This growth package must be big enough to make a difference in an economy as large and dynamic as ours," Bush said.
White House advisers say that, in current terms, 1 percent would amount to around $145 billion, which is along the lines of what private economists say should be sufficient to help give the economy a short-term boost.
Under a White House plan, rebates of up to $800 for individuals and $1,600 for married couples are being considered as one-time tax rebates.
Treasury Secretary Henry Paulson, speaking shortly after Bush's brief remarks, said the key to the plan would be speed and simplicity.
"There are no silver bullets," he said, "But ... to give money to consumers, there's plenty of evidence -- you give money to people they're gonna spend it."
Bush said the income tax relief would help Americans meet monthly bills and pay for higher gas prices.
Also acknowledging the risk of an economic downturn, he said: "The economy's still creating jobs, though at a reduced pace ... Consumer spending is still growing, but the housing market is declining. Business investment and exports are still rising, but the cost of imported oil has increased."
House Republican Leader John Boehner released a statement afterward praising the president's framework.
"Republicans believe this package should focus on putting more money back into the pocketbooks of middle class families and help employers who create jobs for the American people," he said. "These principles give us the framework for doing just that."
Democratic congressional leaders agree that one-time checks should be in the package but are working on a broader measure that would also include aid targeted to the poor and unemployed.
Senate Majority Leader Harry Reid, who was more critical of Bush Thursday, also released a statement praising him for the plan Friday, as did House Speaker Nancy Pelosi.
"I am encouraged and share the President's view that we need prompt bipartisan action to strengthen our economy," Reid said. "I also agree that our focus must be on finding temporary measures that will do the job effectively."
Pelosi said she welcomed Bush's "willingness to work together with Congress to provide urgent relief to the millions of Americans facing economic hardships."
Bush laid out his position publicly for the first time Friday at the White House and pitched it again at a manufacturing plant in Frederick, Md.
White House spokesman Tony Fratto said there are many ways to get quick agreement so a measure can be in place and start working. Bush chose to lay out "principles" with few specifics to the American people now, while bipartisan negotiations with Capitol Hill are taking place privately.
The White House feels Bush was out of the mix for too long, because he was away for eight days in the Mideast while Democratic leaders talked almost daily about the need to stimulate the economy — and how.
Bush has gone down the tax rebate road before. In 2001, he added refunds of up to $300 per individual and $600 per household as a recession-fighting element of the tax cut plan that had been the centerpiece of his 2000 campaign.
Bush urged Friday that Congress make his tax relief permanent.
Economists said a reasonable range for tax cuts in the new package might be $500 to $1,000.
Bush first signaled his support for the approach of income tax rebates for people and tax breaks for business investment in a conference call Thursday with bipartisan congressional leaders.
The Associated Press contributed to this report.