Pelosi, Fed chief huddle on economy

House Speaker Nancy Pelosi met yesterday with Federal Reserve Chairman Ben S. Bernanke to discuss a coordinated plan to help jump-start the nation’s slowing economy.

The meeting was part of a stepped-up effort in recent days by congressional Democratic leaders to focus on the economy. Mrs. Pelosi, California Democrat, and Senate Majority Leader Harry Reid, Nevada Democrat, also are expected to meet soon with President Bush to discuss an economic-stimulus package for the country.

“I hope that we can work together — recognizing the independence of the Fed — and coordinate monetary and fiscal policy that will soften the blow for hard-working families affected by an economic slowdown,” Mrs. Pelosi said after her half-hour meeting with Mr. Bernanke.

Falling home values, high oil prices and a decline in the stock market have raised concerns the United States could slip into recession before the November general election.

A Labor Department report this month showed the nation’s unemployment rate jumped to 5 percent in December from 4.7 percent.

Treasury Secretary Henry M. Paulson Jr. said last week that the U.S. economy slowed “rather materially” at the end of 2007 and urged that any stimulus package should be put into effect swiftly.

Neither Mrs. Pelosi nor Mr. Bernanke would discuss details of their talks.

Democratic leaders are considering a one-time tax rebate of $300 to $500, and restoring a $1,000 tax credit for lower-income families

Mr. Bush, meanwhile, is likely to offer a plan during his State of the Union speech Jan. 28 that includes $500 for each household that would arrive sometime this summer.

Capitol Hill Republicans say any economic-stimulus package must include tax cuts for middle-class families and small businesses.

“Tax increases — even those disguised as ‘spending offsets’ — simply do not stimulate the economy,” said House Minority Leader John A. Boehner, Ohio Republican. “Instead, they will only make today”s economic uncertainty even worse.”

Republicans are pushing for the extension of the president’s 2001 and 2003 tax cuts, which are credited with helping lift the U.S. out of the last recession but are set to expire in 2010.

Mr. Bernanke in November told Congress’ Joint Economic Committee that tax increases “tend to be a drag on consumer spending and on the economy through a number of different channels” and “would probably not be advisable.”

Mr. Bernanke is scheduled to testify Thursday on the economy before the House Budget Committee.

He also has agreed to meet with House Democrats at their 2008 retreat in Williamsburg Jan. 30 through Feb. 1, a Democratic spokeswoman said.

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