WASHINGTON—U.S. President George W. Bush said on Wednesday U.S. economic growth had slowed and while many Americans were concerned about the future, he argued the economy could absorb shocks such as a recession.
"I know a lot of Americans are concerned about our economic future, our overall economy has grown for six straight years but that growth has clearly slowed," Bush said before he signed a $168 billion, two-year economic stimulus package into law. Of that total, $152 billion is earmarked for 2008.
"The genius of our system is that it can absorb such shocks and emerge even stronger," he said.
The U.S. economy nearly ground to a halt in the fourth quarter, growing at just a 0.6 percent rate. The housing market has been plummeting. In January, the job market shrank, for the first time in 53 months.
That has led many economists to forecast that the United States will slip into a recession—and some have said it may already be in one. But the Bush administration has steadfastly denied that would happen.
To that end, the Democratic-controlled Congress and the Republican Bush administration engaged in rare bipartisan cooperation to hammer out the stimulus package, which includes billions of dollars in tax rebates as well as incentives for businesses to buy new equipment.
The package includes tax rebates of up to $600 per individual earning $75,000 in adjusted gross income or less and $1,200 per couple plus $300 per child. Businesses would be able to deduct half the costs of purchases of new equipment.
In a swipe at Democrats, some of whom stood behind the president as he spoke, Bush praised Congress for not including other spending projects in the package.
"The members resisted the temptation to load up this bill with unrelated programs or unnecessary spending, and I appreciated that," he said. Democratic House Speaker Nancy Pelosi's smile faded after that remark.
In addition to the stimulus package, the Federal Reserve has slashed interest rates to 3 percent from 5.25 percent since mid-September to try to address the credit crunch that has sent global markets seesawing.
Details of U.S. Economic Stimulus Package
President Bush Wednesday signed into law an economic stimulus package that is aimed at staving off a recession by offering tax rebates and incentives to businesses to invest.
Here are some details of the plan:
* The total package is worth about $168 billion over two years, roughly 1 percent of U.S. economic output, and will add directly to the U.S. federal deficit.
* Individuals would get rebates of up to $600 and married couples could get up to $1,200, plus $300 per child, no limit. Individuals with annual incomes above $75,000 in adjusted gross income (AGI) or married couples making $150,000 in AGI would get less depending how high their incomes are above those thresholds.
* The plan also includes a provision that Democrats had sought that would allow some low-income workers, retirees on Social Security and disabled veterans who do not earn enough money to owe income taxes to receive a check. Those who made at least $3,000 last year and paid no income taxes would be eligible for a check of up to $300 for individuals and $600 for couples.
* As an incentive to encourage business investment, companies would be able to immediately deduct 50 percent of the costs of purchases of new equipment.
* The House package includes raising the limits on "conforming mortgages" financed by Fannie Mae and Freddie Mac to $729,750 from the current cap of $417,000 through Dec. 31. It would also indefinitely raise the limit on Federal Housing Administration-backed mortgages to that same level from $362,790. Such a move is expected to lower the interest rates on those high-cost loans.