House Speaker Nancy Pelosi (D-Calif.) on Tuesday said Democrats will “keep the door open” to additional stimulus packages, but said some of the actions already taken, including the first recovery measure, are starting to make an impact on the flagging economy.
“We must give it time to work,” Pelosi said. She blamed continuing job losses on a hangover from former President George W. Bush’s policies.
Flanked by economists, House Democratic leaders defended their $787 billion stimulus package and the Obama administration’s efforts to shore up banks and stem foreclosures despite recent stock market declines.
Economist Mark Zandi said lawmakers need to stress that what they are doing will work, and he said additional economic stimulus money, more funding for banks and an even greater foreclosure mitigation package could be needed down the line.
“We are going to need more taxpayer money upfront,” Zandi said.
Zandi acknowledged that right now there is a lack of public confidence in a turnaround. “Right now they just don’t believe” that actions taken so far will work, Zandi said.
Meanwhile, Financial Services Chairman Barney Frank (D-Mass.) outlined several new actions that he said could help restore the financial system.
Frank said that he would push regulators to make “mark-to-market” rules governing financial firms accounting more flexible, although without doing away with it entirely. He also wants more of the Wall Street bailout package to go to smaller community banks, which will be better able to lend money out more quickly.