WASHINGTON House Speaker Nancy Pelosi and Fed chief Ben Bernanke met Monday to discuss how Congress might act to stimulate the slowing economy.
Pelosi, D-Calif., is taking the lead as Democrats controlling Congress have reached out to the White House to work toward an economic stimulus measure that could get enacted relatively quickly.
Pelosi said it was her "hope that we can find a bipartisan initiative recognizing the independence of the Fed and with some coordination so that we can have a fiscal stimulus ... helping families and helping states feeling pressure."
Bernanke, chairman of the Federal Reserve Board, did not comment after the meeting and has been circumspect in his public statements about whether fiscal stimulus such as tax rebates or additional government spending is needed. He signaled last week that the Fed will continue easing interest rates in an effort to keep the economy from plunging into a recession.
But he has sounded open to the idea of a stimulus bill, saying last week that he is interested in seeing "what emerges" and what options might be put on the table by the White House and Congress.
Behind the scenes, Bernanke has told lawmakers he favors congressional action to boost the economy, said an aide to a senior lawmaker who has spoken to the Fed chairman. The aide requested anonymity since the conversation was confidential.
Bernanke is scheduled to testify Thursday before the House Budget Committee.
Both Republicans and Democrats are floating ideas about how to best jump-start the economy, with some polls showing that economic issues ranking with the war in Iraq as the top concern of voters.
Given the difficulties Democrats have had in working with President Bush, it's not a given that the rivals will be able work out an agreement on a stimulus package.
For starters, Democrats say they want to include new federal spending as part of any stimulus bill, floating options such as money for ailing state governments, higher Medicaid spending and an increase in food stamp payments.
Both Republican and Democrats are eyeing tax rebate checks as a way to quickly put money in the hands of consumers, though Democrats are focusing more on targeting the money to the middle class and possibly to poor people who may not pay income taxes.
One idea popular inside GOP circles is to restore the bonus depreciation write-off for big-ticket investments in capital assets and property.
Clashes are certain along the way as Republicans fight against social spending and as Democrats express skepticism of business tax breaks. Still, the pressure to get something passed lends incentive to compromise, even at the risk of alienating core supporters on the right and left.
"The experience with the so-called bonus depreciation for businesses several years ago is that it provided only a small amount of stimulus to the economy at best," said Douglas Elmendorf, an economist with the Brookings Institution at a forum last week.