Bernanke, Paulson Discuss the Economy

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WASHINGTON -- President Bush's top money men are on Capitol Hill today giving lawmakers their take on the state of the economy.

Washington is on an all-out mission to avoid a recession. But the situation doesn't appear to be getting any better with record high foreclosures and lenders tightening credit.

Recession Worries

The souring housing market and credit crisis have a growing number of people worried that the economy is headed into a recession - if it's not already there.

Today on Capitol Hill, Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson and the head of the Securities and Exchange Commission will answer lawmakers' questions about how to keep the economy afloat.

Their testimony comes one day after President Bush signed a nearly $170-billion economic stimulus package - which he called a "booster shot" to the economy.

"I know a lot of Americans are concerned about our economic future. Our overall economy has grown for six straight years -- but that growth has clearly slowed," Bush said.

So the President and Congress plan to give just about every American household tax rebates ranging from $300 to $1,200. Those checks could be in the mail as early as this spring.

The goal is to get people to spend or invest immediately and help the economy rebound. But according to one poll, only 19-percent say they plan to spend their rebate checks. Forty-five percent say they will use the money to pay bills and 32 percent say they will invest.

The stimulus plan also includes provisions to help the slumping housing market and struggling homeowners.

Project Lifeline

With foreclosures now at record highs, the federal government this week endorsed a new plan that addresses the mortgage meltdown.

"Project lifeline is aimed at homeowners who face a real risk of losing their home and have not yet addressed the problem." Paulson said.

The program includes six of the largest banks and mortgage companies - including Wells Fargo, Countrywide, JP Morgan Chase, Washington Mutual, Bank of America, Citigroup - and temporarily puts a freeze on foreclosures to help homeowners, 90-days behind in their mortgage payments, work out a plan with their lenders.

Still, despite the worry, Paulson says the U.S. should dodge an economic decline.

"Our economy will continue to grow although at a slower pace in the coming quarters and that it remains fundamentally diverse and resilient," he said.

But for many Americans, the problem now is that the economy feels far from resilient. According to an Associated Press poll, 61 percent say it feels like we're in a recession now.

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CBN News
John Jessup

John Jessup

CBN News Washington Correspondent

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