President George W. Bush called on Congress on Friday to give the U.S. economy a "shot in the arm" with an election-year package of temporary tax cuts and other measures worth up to $150 billion (77 billion pounds).
Bush said the United States, where share markets have slumped and unemployment is rising, faced the risk of an economic downturn but that his advisers still expected continued growth, albeit at a slower pace.
He said he wanted Congress to move quickly on a stimulus package that would focus on tax rebates for families and incentives to encourage business investment. The White House said the package could create about 500,000 new jobs.
"This growth package must be built on broad-based tax relief that will directly affect economic growth and not the kind of spending projects that would have little immediate impact on our economy," Bush said at the White House.
Treasury Secretary Henry Paulson said the administration hoped for a package worth about $140 billion to $150 billion, which is a little more than 1 percent of the economy's size.
Financial markets are reeling amid bleak reports of declining retail sales and rising unemployment on top of soaring oil prices and a credit crunch brought on by a crisis in subprime mortgages.
Bush's plan failed to reassure investors on Friday as world stock prices fell again, with U.S. stocks tumbling to close out the worst week for the benchmark S&P 500 index in 5 years on fears the White House effort will not be enough to avoid recession.
Economists are talking of a possible recession taking hold before presidential and congressional elections in November and the debate over an economic stimulus has been taken up by candidates campaigning to succeed Bush in the White House.
Bush and the Democratic-led Congress are in rare agreement that a stimulus is needed. But they are still hammering out the details of a plan that is likely to include tax rebates of several hundred dollars each to help spur consumers as well as temporary tax breaks for businesses.
TAX REBATES
Under discussion are proposals to trim the lowest income tax rate and give the money back in a rebate. Lawmakers are also considering allowing businesses to immediately write off 50 percent of their new investments.
