Stimulus Showdown on Capitol Hill

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There's a showdown brewing on Capitol Hill -- debate over competing bills that aim to revive the economy could slow down economic progress.

And the Fed's most recent half-point cut shows its not just lawmakers getting in on the action.

Click play watch CBN News Correspondent John Jessup's report and to get Pat Robertson's analysis of the situation on Capitol Hill.

Tension is building in the Senate over a vote that could stall Washington's plan to inject money into the economy -- and fast.

The bill under consideration would add tens of billions of dollars in aid and benefits to a version already passed by the House.

That puts the Senate at odds not only with the House's bipartisan plan, but with President Bush as well.

"If you're truly interested in dealing with slowdown in the economy, the Senate ought to accept the House package, pass it, and get it to my desk as soon as possible," Bush said.

The Senate bill would shrink the size of the rebate checks most Americans would get, in order to expand benefits for seniors and disabled veterans. It would also extend assistance for the unemployed whose benefits have run out.

Others in the Senate think the bill should go farther to include food stamps and heating assistance for the poor.

But Washington's action plans to stimulate the economy aren't limited to the chambers of Congress.

Policy makers at the Fed made history this week with the biggest series of rate cuts in a short period of time. The federal funds rate now stands at just 3 percent after the fed cut rates by another half point Wednesday -- just eight days after last week's emergency rate cut of three-quarters of a point.

All of this is an effort to help fight off a recession.

"They really are trying to get ahead of the slowing economy and get some stimulus into the system as quickly as possible," said Julia Cordavo from Barclays Capital.

Many analysts think the Fed could continue cutting rates to stave off growing economic concerns.

"Technically, it's not recession but it's certainly going to feel that way and that's what we're going to have to deal with for the entire year, I'm afraid," said Bernard Baumohl with the Economic Outlook Group.

That is precisely what policy and lawmakers are trying to combat. to stimulate the economy through increased borrowing by consumers and businesses.

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John Jessup

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