Bernanke endorses more stimulus for weak economy

WASHINGTON -- Federal Reserve Chairman Ben Bernanke on Monday endorsed congressional efforts to craft a new economic stimulus package, noting risks of a "protracted slowdown."

Federal Reserve Chairman Ben Bernanke on Monday increased the odds of a second economic stimulus package, endorsing the action as a way to prevent a "protracted slowdown."

Bernanke, responding to questions at a House Budget Committee hearing, declined to say whether the country is in a recession. "We are in a serious slowdown in the economy, which has very significant consequences for the public, and whether it's called a recession or not is of no consequence," Bernanke said.

The central bank chief also declined to give a specific price tag for a stimulus plan but said it should be "significant." Bernanke did say Congress should structure the legislation to boost spending when the economy is weakest, minimize long-term deficits and get credit flowing through direct loans, loan guarantees or tax credits.

"With the economy likely to be weak for several quarters, and with some risk of a protracted slowdown, consideration of a fiscal package … seems appropriate," Bernanke said.

At the White House, which has been lukewarm, press secretary Dana Perino told reporters that President Bush is open to a stimulus bill, depending on how it's structured. Democratic presidential nominee Barack Obama and Republican nominee John McCain have laid out plans, as have House and Senate leaders. The two political parties have areas of agreement — such as enhancing unemployment benefits — but differ on tax policy and Democratic plans to spend on infrastructure such as roads or bridges.

Congress could come back in a special lame-duck session after the Nov. 4 election to consider stimulus legislation. Brookings Institution economist Martin Baily told the panel a $150 billion to $300 billion measure would be appropriate. Congress, in February, passed a $168 billion stimulus bill with consumer tax rebates and business tax cuts.