Federal Reserve Chairman Ben Bernanke endorsed plans for a second economic stimulus package, though he declined to give an estimate on how much money would be needed or what specific programs should be included.
To best achieve its goals, any fiscal package should be structured so that its peak effects on aggregate spending and economic activity are felt when they are most needed, namely during the period in which economic activity would otherwise be expected to be weak, Bernanke told members of the House Budget Committee.
Democratic leaders in the House said they would take another shot at passing legislation which, in part, would include a temporary boost in federal payments to state Medicaid coffers. The House previously passed an additional stimulus package in September, only to see that measure blocked in the Senate.
Iris Lav, deputy director of the Center on Budget and Policy Priorities, said that at least 16 states are projecting deficits for fiscal 2010 that so far total $18 billionnumbers she expects to severely worsen when all states figure their budgets. Lav called for a $50 billion economic package, with about $35 billion earmarked for Medicaid. Its money that can be used right away; its immediately put to work (and) we know people will be coming rapidly on the Medicaid rolls, she said. -- by Matthew DoBias