Bush to outline stimulus plan

WASHINGTON (CNN) -- President Bush will outline a new attempt to boost economic growth and avert a feared recession in a speech Friday after a day of talks between the White House and congressional leaders.

The president held talks with Democratic and Republicans on Capitol Hill on Thursday as Ben Bernanke, the chairman of the Federal Reserve, warned lawmakers to waste no time enacting a fiscal stimulus package to help beleaguered consumers. Both parties' leaders in the House of Representatives emerged from a 90-minute meeting later in the day with no details, but a commitment to get something done quickly.

White House spokeswoman Dana Perino said Bush concluded during his recent trip to the Middle East that a stimulus package is needed, and said Friday's remarks will lay out "the principles for what an effective growth package would look like, and what would be ineffective."

And House Speaker Nancy Pelosi, D-Calif., said her talks with the White House and GOP leaders have been "great."

"The first step was the president had to admit there was a problem, and he did so in this conversation," she said.

The president held a 30-minute conference call with congressional leaders Thursday, "and he told them he thought it was important that he talk to the American people about his coming to the conclusion that a growth package is important for the economy so we can keep economic growth going," Perino said. "And they pledged to work together in a spirit of cooperation."

Some economists have suggested that the economy is heading into a recession or may already be in one. Stocks have plummeted this year amid worries about a recession. The Dow Jones industrial average dropped more than 300 points Thursday after reports of slowing growth and a massive writedown by brokerage giant Merrill Lynch (MER, Fortune 500), which reported a nearly $10 billion loss for the fourth quarter of 2007 and wrote off more than $11 billion in bad mortgage debts.

Bush acknowledged last week that economic signals "have become increasingly mixed" in recent weeks, but warned against "aggressive" new regulations and repeated his demand that Congress permanently extend the tax cuts he pushed through in his first term.

The White House did not push the tax cuts Thursday - an omission a Democratic leadership source called "hugely helpful."

Senate Majority Leader Harry Reid, D-Nev., expressed concern that Bush is short-circuiting congressional input by going public with a plan by week's end.

"The president's strategy threatens to unnecessarily politicize the inevitable bipartisan negotiations we will need to quickly enact legislation," Reid said in a written statement.

But House Majority Leader Steny Hoyer, D-Md., said he did not believe Bush would "go off unilaterally." And the chamber's Republican leader, John Boehner, brushed off any suggestion that the president was getting out ahead of Hill leaders.

"He's going to talk about the problem, the need to respond, the need to work in a bipartisan way and probably outline some broad principles about what we ought to be doing," Boehner said. Asked whether Bush's "broad principles" would mirror those under discussion in Congress, he said, "I don't think they'll be inconsistent with what we've been talking about."

Bernanke told the House Budget Committee earlier Thursday that he does not believe the economy will enter a recession, but he did say he expects the economy to grow at a "slow pace" this year and possibly into the beginning of 2009. He said Congress needs to take decisive action to boost the economy.

"To be useful, a fiscal stimulus package should be implemented quickly and structured so that its effects on aggregate spending are felt as much as possible within the next 12 months or so," Bernanke said. But he said any package should be "explicitly temporary" in order to avoid running up the government's long-term debt.

He said extending the Bush tax cuts - which are set to expire in 2010 - could have a positive impact on the stock market today. But he stopped short of suggesting that the Bush tax cuts should be made permanent, telling lawmakers he supports "the law of arithmetic."

"What comes in at least has to equal what goes out at some point," he said.

CNN's Kathleen Koch and Deirdre Walsh contributed to this report.