Will this be enough to at least delay a recession? I doubt it:
WASHINGTON (Thomson Financial) - US President George Bush today jump-started the talks between the White House and Congress over how to give a needed boost to the slowing US economy, announcing he wants to pump about 140 bln usd into the hands of consumers and businesses.

'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 pct of GDP,' Bush said today in the White House.

The Commerce Department said last month the economy is on pace to reach about 14 trln usd in 2007. The economy grew at an annualised 4.9 pct in the third quarter of last year but is expected to have slowed to a 1.3 pct growth rate in the final three months of last years.

Some economists say the first half of this year may be negative but the White House and Federal Reserve Board chairman Ben Bernanke have said the economy is merely slowing.

Bush called on Congress to be implement as package 'as soon as possible.'

'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,' he said. That's an apparent reference to the desire of some Democrats to include new government spending projects.

Bush also said the package must be temporary, and 'must not include any tax increases.'

Bush publicly called for tax relief for both individuals and families as well as US companies, two elements that are expected to emerge in the final proposal.

Bush did not offer any specifics on the size of the breaks in his public remarks, but an official said the president is pushing for tax rebates of as much as 800 usd per person, or 1,600 usd per married couple, but Democrats in Congress want a smaller figure to keep the cost down. A final figure is still to be determined.

'An effective growth package must include tax incentives for American business -- including small businesses -- to make major investments in their enterprises this year,' he said.

'An effective growth package must also include direct and rapid income tax relief for the American people,' he added, saying this refund could be spent as individuals and families see fit.

Bush said the next step in getting these details nailed down is to meet with Democratic leaders of Congress, and said Treasury Secretary Henry Paulson would coordinate these efforts. Members of Congress are expected to meet with Bush next week to continue discussions on a stimulus package.

Speaking after Bush's remarks, Paulson declined to offer any details about what the White House favors in a package, but said the White House wants the 'biggest portion' of the initiative to be in the form of rebates to taxpayers. He also stressed that the relief would be directed to 'those who are paying taxes.'

Paulson also indicated that the White House does not favor targeted relief to certain groups of taxpayers, saying that broader relief would reach taxpayers more quickly.

'If we can stay broad based and simple, we'll be able to be quicker and be able to have a bigger impact on the economy quicker,' he said. Congressional Democrats, in contrast, have said publicly that they want to target relief toward certain groups, such as people who are struggling to make mortgage payments.

Ed Lazear, Chairman of the Council of Economic Advisors, added that the administration is primarily focused on providing short-term relief, rather than looking at helping specific groups.

Paulson added today that he believes the housing market still 'needs to correct,' and cited ongoing liquidity problems in financial institutions that also need to be resolved.

Bush today indicated he would not press for the inclusion of language that would extend the tax cuts passed earlier in his presidency, but said extending these cuts should be considered after the stimulus package is approved.

'While passing a new growth package is our most pressing economic priority, Congress needs to turn next to the most important economic priority for our country -- making sure the tax relief that is now in place is not taken away,' Bush said.

Without an extension, he said, lower tax brackets would disappear, taxes on married couples and people with children would rise, and taxes on dividends and capital gains would increase as well.

Bush held a rare conference call with congressional leaders just after Bernanke told the House Budget Committee that any fiscal stimulus should be temporary and timely.

An official who asked not to be named said talks are still ongoing, but said Democrats on Capitol Hill are pushing to limit rebates to those making less than 115,000 usd per year.

The president is also seeking an acceleration in the tax break given to businesses for investing in new equipment, while Democrats want to extend unemployment insurance to individuals, adding an additional 13 weeks beyond the existing 26 weeks.

The total cost of the package is still not finalized, but Bernanke told Congress it would be 'reasonable' to have a package somewhere between 50 bln usd and 150 bln usd.