U.S. Moves Toward Second Stimulus This Year As Bernanke, Bush Shift (Ryan Donmoyer & Scott Lanman)

Created by : Francis Goodwin View profile

Oct. 21 (Bloomberg) -- Lawmakers and officials moved toward forging a second fiscal stimulus bill after Federal Reserve Chairman Ben S. Bernanke

endorsed the idea and the Bush administration dropped its opposition.

Bernanke warned legislators yesterday the credit crunch is ``hitting home,'' with Americans unable to get auto loans and companies denied cash, and recommended measures to help borrowers. White House Press Secretary Dana Perino said President George W. Bush was ``open to the idea'' of a new stimulus.

Momentum for fresh measures built after an earlier stimulus package failed to prevent a jump in the unemployment rate to a six-year high and the longest slump in retail sales since at least 1992.

Bernanke ``had to do what he did'' in supporting a further federal stimulus measure, said Lyle Gramley, a former Fed governor who is now senior economic adviser at Stanford Group Co. in Washington. ``If he went up there and said, `Well, I'm indifferent to a stimulus package, I'm opposed to it,' he would be sending the wrong signal.''