For many Americans, hearing the sound of items ringing up at the store is music to the ears. But with all the talk of a recession, Americans may not be spending as often as they had been.
Now that Congress back in session - and President Bush home from his weeklong tour of the Middle East - Washington is focusing on ways to energize the economy.
For more on what this could mean for the economy, watch CBN News Financial Analyst Drew Parkhill, following this report
On Wednesday, House Speaker Nancy Pelosi, D-Calif., and Republican leader John Boehner of Ohio promised to craft legislation to energize the weakening economy.
And they're all in rare agreement to cooperate and come up with a plan.
"One that we can work together with the White House on, that would be timely, targeted and temporary," Pelosi said.
"I'm hopeful that we can come together in a bipartisan way to address the needs of the American people," Boehner said.
Rebates, and Cuts in Interest
Today, at a hearing on Capitol Hill, Federal Reserve Chairman Ben Bernanke agreed that an economic stimulus package might be what the economy needs.
"To be useful, a fiscal stimulus package should be implemented quickly and structured so that its effects on aggregate spending are felt as much as possible within the next twelve months," Bernanke told lawmakers.
The notion behind the rebates, for instance, is to get money into the hands of consumers quickly so that they boost spending, helping energize the national economy.
"Stimulus that comes too late will not help support economic activity in the near term, and it could be actively destabilizing if it comes at a time when growth is already improving," Bernanke said.
"Thus, fiscal measures that involve long lead times or result in additional economic activity only over a protracted period, whatever their intrinsic merits might be, will not provide stimulus when it is most needed," he added.
The bi-partisan economic stimulus package would likely include tax cuts for middle and low-income families, and possibly rebates between $300 to $600. Republicans want tax breaks for businesses to spark investment and lowering the corporate income tax rate.
While still in the works, the package is predicted to be worth anywhere between $75 to $150 billion. In addition, the fed is expected to cut a key short-term interest rate by as much as a half a point at its next meeting on January 30.
Some economists say these measures are necessary. But others believe we are not heading into recession, rather just an economic slowdown.
"There are some conflicting signs right now; my feeling is we are not in a recession," economist Conrad Dequadros said.
But Washington wants to prevent a slowdown from turning into a recession. And political leaders hope the "help is on the way" good news will get both consumers and businesses spending again. They know anything they do must be done quickly and needs to help the economy this year.
They hope to have a plan in place by the end of the month before President Bush delivers the State of the Union.
Source: The Associated Press