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Bloomberg: Democrats Are Weighing More Tax Rebates, Pelosi Says

By Laura Litvan

July 15 (Bloomberg) -- House Democrats are weighing plans for another round of tax rebates as part of a legislative package to boost the economy this fall, House Speaker Nancy Pelosi said.

“We will be proceeding with another stimulus package, and we once again hope we will work in a bipartisan way,'' she said after House Democratic leaders met with a group of economists to discuss the spreading housing crisis and rising energy prices.

Pelosi and other House Democrats said a second stimulus package would probably include more spending for roads and other infrastructure, expanded unemployment benefits, home-heating assistance for low-income families and some aid for states struggling with budget deficits.

Plans for the stimulus legislation are taking shape as Democrats are also racing to approve the Bush administration's proposed rescue plan for Fannie Mae and Freddie Mac by early next week.

“This is a serious situation,'' said former Treasury Secretary Larry Summers, who attended the meeting with Democrats. ``We are in much more danger of responding inefficiently than in responding excessively.''

In February, Congress sent Bush a $168 billion economic stimulus measure that included tax rebates to 111 million households beginning in May. Rebate checks in the legislation were as high as $600 for individuals.

Pelosi said Democrats will need to work with President George W. Bush to determine the timing of a second stimulus package. Bush said today he would prefer to wait to see how the earlier rebates affect the economy.

“We're always open minded to things, but we'll see how this one works,'' he said.

Alan Blinder, a former vice chairman of the Federal Reserve and a Princeton University economist, said the U.S. is experiencing a series of ``rolling financial crises'' and that the impact of the earlier round of tax rebates has been ``swallowed up'' by rising energy prices.

“The U.S. economy is in a recession that is probably getting worse,'' said Alan Sinai, chief global economist at Decision Economics Inc., who, like Blinder, attended the meeting with Democrats.