If at first, you don’t succeed

Congress and the Bush administration are beginning to agree on the idea of a second stimulus package but right now that’s as far as the agreement goes.

Congressional Democrats have been pushing for a second round of stimulus — although now it’s called "economic recovery" because "stimulus" sounds so wasteful. They got a big boost this week when Fed chairman Ben Bernanke endorsed the idea but in carefully couched terms — "consideration of a fiscal package by the Congress at this juncture seems appropriate."

He laid down several guidelines; that it be short-term, have an immediate impact and not add to the long-term deficit, a tall order. And, the chairman said, the best mechanism would be to improve, perhaps through loan guarantees or tax credits, access to consumer credit and mortgages.

That’s not what the Democrats have in mind. They proposed resurrecting and more than doubling, to more than $150 billion, a stimulus bill the House approved last month. The White House opposed it, and presumably still does, and the measure failed in the Senate.

The principal elements of that bill were $37 billion for public works construction, $6 billion in extended unemployment benefits and $18 billion in direct aid to the states to help with Medicaid payments and food stamps.

Although the White House says it is "open" to hearing the Democrats ideas, it also like shares House Republican leader John Boehner’s promise to oppose "hundreds of billions in new government spending masquerading as ‘fiscal stimulus.’ "

If a stimulus package is really needed — and the effects of the $168 billion in tax rebates Congress passed last February were short-lived — Bernanke’s route of improving access to credit seems the way to go. And by that time we may begin to see the impact of the $700 billion bailout and the $540 billion the Fed is pumping into money market funds.

But the careful consideration Bernanke called for is likely to go out the window depending on whether there’s another economic scare and, of course, the outcome of the election.