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Published: Jul 17, 2008 12:30 AM
Modified: Jul 17, 2008 05:01 AM

Dems push for new stimulus

Spike in inflation adds to pressure for government intervention, but Republicans are skeptical

 

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BIGGEST JUMPS

Average price increases from May to June for:

GASOLINE - 10 percent

AIRLINE TICKETS - 5 percent

FRUITS AND VEGETABLES - 2.8 percent

(THE ASSOCIATED PRESS, BUREAU OF LABOR STATISTICS)

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"The first check may have had a small, one-time effect," said Muhammad Islam, an associate professor of economics at St. Louis University. "But the real problems are concentrated in the finance and energy sectors, and those aren't going to go away for a while."

Backers and skeptics

Pelosi convened an economic meeting Tuesday at which lawmakers and economists generally sympathetic to Democrats made the case for more stimuli.

"I think all of us believe that the problems are likely to get worse before they get better, since unemployment in the labor market lags the entire economy," Rebecca Blank, a senior fellow in economic studies at the Washington research center the Brookings Institution, said at the meeting.

As a result, she said, "The argument for economic stimulus, particularly targeted at some of these issues, is very, very high."

Outside Democratic circles, however, the ideas were greeted with skepticism and even sharp criticism.

"If the speaker is serious about taking action to stimulate the economy, she should start by allowing a vote on increased American energy production," said House Republican leader John Boehner of Ohio.

Many Republican lawmakers want Congress to end the ban on drilling off most U.S. coastlines as well as permit exploration in the Arctic National Wildlife Refuge in Alaska.

The White House on Wednesday repeated its stance that it's too soon to seriously consider a second stimulus. "We're always open-minded to things," President Bush said Tuesday, "but let's see how this [first] stimulus package works."

(The Associated Press contributed to this report.)


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The Associated Press contributed to this report.
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