5.30pm GMT
Bush calls for tax breaks to avoid recession
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- Friday January 18 2008
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The US president, George Bush, today called for big tax breaks to stave off recession as the American economy struggled to shake off the effects of a housing crisis.
Bush proposed a stimulus package of about $145bn (£74bn) – about 1% of gross domestic product – at a time when the administration is increasingly worried about the knock-on effects of a housing slump and a tightening of credit markets.
"Letting Americans keep more of their money should increase consumer spending," Bush said.
Bush, who acknowledged the risk of a downturn, said Congress should try to draft legislation as soon as possible to "keep our economy growing and creating jobs".
The president called for "direct and rapid" tax relief for US consumers and businesses, saying that such a plan was the country's "most pressing economic priority".
Returning money to consumers and firms would be "a shot in the arm" for the economy," he said.
Bush, the chairman of the Federal Reserve, Ben Bernanke, and senior congressional leaders yesterday called for Washington to act quickly to boost the economy.
Bernanke said the Fed was ready "to take substantive additional action as needed to support growth", but his remarks failed to stem another slide on Wall Street. The Dow Jones industrial average has now fallen more than1,000 points since the start of the year.
The Dow was on the slide again today, unimpressed by Bush's talk of tax relief, which some commentators fear will stimulate another economic bubble. In lunchtime trading, the index was down almost 80 points at 12,083.
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