In a move to stimulate what the news media and many political and economic pundits are either speculatively or actually calling a "recession" in the United States economy, President Bush announced a proposal for an economic stimulus plan worth $150 billion designed to ward off what his administration is instead referring to as "areas of real concern."
In comments to the media, President Bush would not use the term "recession" and carefully guarded against referring to the economy in negative terms. Yet his portrayal of slower growth and instability in the markets was unmistakably dour.
The two pillars of his the economic stimulus package focus on consumer spending and business investment.
The consumer spending portion of the plan would eliminate the 10 percent tax bracket currently a part of the income tax system. More drastically, however, it would provide early rebate checks for all taxpayers, depending on income, from a lower limit of $300 to an upper limit of $1800.
Unmarried individuals would receive up to $600, while married couples would receive up to twice that amount, up to $1200. Children would be worth an additional $300 in rebates, up to a maximum of two children.
The section of the proposal aimed at nudging business investment includes a bonus 50% depreciation for fixed assets as well as a doubled limit for deduction of expenses, raised to $250,000. President Bush indicated that the package of business growth incentives could create as many as 500,000 new jobs by giving businesses the incentive to hire new employees.
The one section of the economic stimulus proposal not related to tax breaks was the modification of the policies of government-backed mortgage agencies Freddie Mac and Fannie Mae.
Currently, the agencies observe a mortgage-purchasing limit of $417,000; President Bush's economic stimulus package would raise the limit to $729,750, making more homeowners eligible to deal with the government-backed agencies rather than the subprime lenders to whom many make out their mortgage checks.
Currently, H.R. 5140, the bill covering the economic stimulus plan, has been passed by the House of Representatives with a vote of 385 to 35, and now awaits vote in the Senate. Many believe that the Senate will prove to be a much tougher test for the bill, as counter proposals are already being offered.
Immediately after President Bush announced the details of his economic stimulus plan, voices both for and against the measures he proposed could be heard. The main theme running through many of the responses in the media, both print and Internet, was that the Bush plan would help in the short run, but would fail to sustain real stimulus over a long period of time into the future.
Presidential candidates, seeing an opportunity to have the country watch them in action, offered stimulus packages of their own that sought to improve upon the short-term gains for long-term economic stability.
The GOP candidates, in particular, with their collective commitment to cutting taxes and maintaining tax cuts, jumped in to offer further measures to ensure the tax cuts they promise would stick long into the future.
Mitt Romney's economic stimulus plan would look to squeezing out what he sees as unnecessary taxes, including reducing the lowest income tax bracket, permanently eliminate the income tax on seniors, and eliminate taxes on savings for the middle class.
To stimulate business growth, Romney would plan to provide tax credits that cover equipment expenses of 100% for two years.
And, in response to the expansive and growing housing crisis, Romney would modify Federal Housing Administration requirements to qualify more families for FHA mortgage loans. Romney's plan would reportedly cost around $233 billion.
The only other GOP candidate to formally draft an economic stimulus proposal in response to President Bush was Texas Congressman Ron Paul.
Although many see Paul as a long shot in the campaign, his netroots support has gained him not only a sizable following, but a steady stream of campaign cash that puts him above several higher-profile candidates in the funds category.
Paul's economic stimulus plan involves a traditional GOP approach of focusing on tax cuts, but his plan is distinct in several ways: he would eliminate taxes on dividends, savings, social security benefits, capital gains, as well as gratuities earned by service workers.
However, a major portion of Paul's plan involves the issue that sets him apart from all other GOP candidates, which is his staunch opposition to the war in Iraq.
Paul would reduce overseas spending on military defense drastically, moving to withdraw troops that he says are sustaining the economies of international competitors in Japan, Korea and Europe.
The Democratic candidates also offered detailed economic stimulus plans to help boost the economy.
Illinois Senator Barack Obama's plan would immediately introduce $75 billion into our economy in the areas of consumer spending, directing $250 checks to low and middle income individuals, and an extra $250 to senior citizens, all of whom are more likely to spend their money quickly.
To aid the housing crisis, the money would fund a $10 billion foreclosure rescue fund to aid "responsible" families, as well as provide funds for the local and state governments in areas hit hardest by the housing crisis.
In addition to these immediate funds, $45 billion would be kept in reserve to provide additional stimulus if needed.
New York Senator Hillary Clinton's economic stimulus plan focuses on long-term economy growth, including an assortment of measures to halt the housing crisis and invest in job growth.
She would establish a $30 billion Emergency Housing Crisis Fund to provide assistance at the local level for areas hardest hit by the housing crisis, and start a 90-day moratorium on subprime mortgage loans and a five-year freeze on housing interest rates.
The investment portion of Clinton's plan would provide $25 billion in energy-b ill assistance and $15 billion in expanding unemployment insurance and alternative energy investments.