WASHINGTON – With the price of oil hovering near $100 a barrel and overall economic anxiety on the rise, President Bush said Thursday that he may use his upcoming State of the Union address to propose a stimulus package intended to promote growth and shore up weak parts of the economy.
Forecasting his priorities as he enters his final full year in office, Bush said he is soliciting ideas from advisers about ways to address particular economic troubles. However, he did not commit to taking new action amid an internal administration debate about whether and how the government could influence the situation.
“In terms of any stimulus package, we’re considering all options, and I probably won’t make up my mind as to whether or not I lay one out until the State of the Union,” Bush said in an interview. “We are listening to a lot of good ideas from different people.”
Aides previously said Bush was considering stimulus proposals, mainly in the form of targeted tax cuts, and the president’s comments indicated he may unveil them in coming weeks. He is scheduled to meet today with a working group on financial markets led by Treasury Secretary Henry M. Paulson Jr. and is to give an economic speech in Chicago on Monday. Aides said no decision will be made until he returns from a trip to the Middle East on Jan. 16; his State of the Union address is scheduled for Jan. 28.
The concern in the White House follows a number of troubling indicators that some economists say may point to a recession this year. Beyond the volatility in the housing market and the surging price of oil, a new report this week suggested that the manufacturing sector may be contracting. Meanwhile, the Commerce Department reported the largest monthly drop in construction spending on single-family homes in 14 years, while orders for durable goods dropped for two consecutive months. On the other hand, Commerce said Thursday that orders for manufactured goods rose by 1.5 percent in November.
Economists and administration officials are anxiously anticipating this morning’s employment report from December amid speculation about whether it will show lower job growth. Administration officials said they have been trying to sort out often-conflicting data and want to wait for fresh information over the next couple of weeks before settling on a course of action.
As the Bush team evaluates possible options, the official said, the priority would be using targeted tax breaks to increase business investment or consumer spending. “What everyone’s looking at is what is the fastest way to get money out there,” said a senior administration official.
Bush rejected tapping into the Strategic Petroleum Reserve to try to offset the rise in oil prices, which briefly reached $100 a barrel on Wednesday and Thursday before falling a bit. “It’s not the kind of emergency that would define the use of the SPR as far as I am concerned,” he said. “Hundred-dollar oil is a reflection of supply and demand.”