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Fast Action Urged On Economic Aid

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By BEN FELLER, The Associated Press

Published: January 28, 2008

WASHINGTON - President Bush's chief negotiator on an economic aid deal said Sunday that the Senate should quickly get behind a plan or risk drawing the resentment of a frustrated public.

The president and House leaders have agreed on a proposal to provide tax rebate checks to 117 million families and give businesses $50 billion in incentives to invest in new plants and equipment. The goal is to help head off a recession and to boost consumer confidence.

"I don't think the Senate is going to want to derail that deal," Treasury Secretary Henry Paulson said. "And I don't think the American people are going to have much patience for anything that would slow down the process."

But many senators say they are entitled to their ideas and that they never agreed to be deferential to the House and the White House on the final terms. Senate Majority Leader Harry Reid, D-Nev., agreed that the negotiations should move through the House first, but he and other senators still want to have input.

The Senate is considering adding such elements as extending unemployment benefits for workers whose benefits have run out, boosting home heating subsidies and raising food stamp benefits.

When asked if such ideas would be deal-breakers, Paulson said he did not "want to cast a shadow on this rare bipartisan moment."

Paulson negotiated the deal with House Speaker Nancy Pelosi, D-Calif., and Minority Leader John Boehner, R-Ohio. The secretary said some of the elements the Senate is considering may have merit but were excluded from the current deal to keep it simple and targeted.

RECESSION RISK

LOOKING FORWARD: Economists predict that the Federal Reserve will probably keep dropping rates for much of the year in order to boost the economy.

NEXT STEP: The agency is expected to cut rates by as much as one-half of a percentage point at its scheduled meeting this week.

HAZARDS: Potential risks include: inflation, a need to abruptly raise rates and diminished returns on savings accounts and other similar products.

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