Pelosi for "aggressive action" to boost shaky U.S. economy

New York, Nov 7 (PTI) Favouring an "aggressive action" to
boost the shaky U.S. economy, House Speaker Nancy Pelosi has
proposed a two-stage effort with a USD 60 to 100 billion
stimulus package this month followed early next year by a
"permanent tax cut".

In an interview with the Wall Street Journal, Pelosi
pointed to weakness in the nation's job market, and asked the
White House, long sceptical of Democratic-led stimulus
efforts, to work with Congress in the waning days of President
George W. Bush's term.

She said the U.S. can't wait for President-elect Barack
Obama to be sworn into office.

Pelosi's call for "aggressive action," the Journal said,
came as Obama scheduled a meeting with members of his economic
transition team to be held Friday.

Taken together, the twin moves signalled that the
flagging economy will receive immediate attention from a
Democratic Party, fresh from huge electoral wins but anxious
about turmoil in the stock market, a shrivelling job market
and plunging home prices, it added.

In the two days since Obama and Congressional Democrats
racked up big victories, the Dow Jones Industrial Average has
fallen more than 900 points.

"The economy needs something sooner" than next year,
Pelosi said, adding that any measure enacted in a lame-duck
session of Congress this month would be a down payment on
additional stimulus enacted later.

"Let's see if we can't do something, working together
now, that gives us a two-month jump," she said. "We'll take
the longer view as soon as we take over in January."

In the long term, Pelosi said a capital-gains tax cut, as
pushed by Congressional Republicans, should be considered as
part of a "tax simplification" bill, not a stimulus package.

Pelosi did stress, however, that the "second piece" of
the Democratic stimulus agenda should include a tax cut and
would be part of a bill moved early next year.

Details have yet to be determined and will depend on
further discussions with Obama, the paper said. But the
speaker prefers a tax cut over a tax rebate.

Pelosi said a tax cut would have a more immediate impact
on the economy, especially if the government speeds dollars
into worker paychecks by adjusting tax-withholding tables.

"The impact is faster than a rebate, which takes a few
months to get into people's hands," she said.

Obama, the paper said, will meet his top economic
advisers in Chicago Friday, including former Treasury
Secretary Lawrence Summers, a top candidate for a second stint
at Treasury, former Federal Reserve Chairman Paul Volcker,
also a candidate, and Robert Rubin, another former Treasury
secretary with an outside chance at a return engagement.

Also invited are other advisers who could play roles in
the Obama economic team, such as billionaire investor Warren
Buffett, Chief Executive Eric Schmidt and Roger W. Ferguson, a
former Fed vice chairman who now heads the giant
public-employees pension fund, TIAA-CREF.

Those advisers were all named yesterday to Obama's
17-member transition economic-advisory board. Other members
include Time Warner Chairman Richard Parsons and Xerox C.E.O.
Anne Mulcahy.

Obama economic aides were quoted as saying that the
emergency meeting -- and the "all-star" cast -- was meant to
project urgency for a president-elect who knows the economy
will be his most pressing issue. PTI