President Bush on Friday called for about $145 billion worth of tax relief and other incentives to stimulate a sagging economy and fend off a possible recession. He said a growth package must include tax incentives for business investment and "direct and rapid" tax relief for individuals.
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. 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.
"Letting Americans keep more of their money should increase consumer spending," he said.
Bush said that Congress should work as soon as possible to send him legislation to "keep our economy growing and creating jobs."
The president and Congress are scrambling to take action as fears mount that a severe housing slump and painful credit crisis could cause people to close their wallets and businesses to put a lid on hiring, throwing the nation into its first recession since 2001.
"This growth package must be big enough to make a difference in an economy as large and dynamic as ours, which means it should be about 1 percent of GDP," Bush said. He said the package should be built on "broad-based tax relief" that will directly affect economic growth.