Favouring 'aggressive action' to boost the shaky American economy, House Speaker Nancy Pelosi has proposed a two-stage effort with a $60-100 billion stimulus package this month followed early next year by a 'permanent tax cut'.
In an interview with the Wall Street Journal, Pelosi pointed to weakness in the nation's job market, and asked the White House, long sceptical of Democratic-led stimulus efforts, to work with Congress in the waning days of President George W Bush's term.
She said the US can't wait for President-elect Barack Obama to be sworn into office.
Pelosi's call for 'aggressive action,' the Journal said, came as Obama scheduled a meeting with members of his economic transition team to be held on Friday.
Taken together, the twin moves signalled that the flagging economy will receive immediate attention from a Democratic Party, fresh from huge electoral wins but anxious about turmoil in the stock market, a shrivelling job market and plunging home prices, it added.
In the two days since Obama and Congressional Democrats racked up big victories, the Dow Jones Industrial Average has fallen more than 900 points.
"The economy needs something sooner" than next year, Pelosi said, adding that any measure enacted in a lame-duck session of Congress this month would be a down payment on additional stimulus enacted later.
"Let's see if we can do something, working together now, that gives us a two-month jump," she said. "We'll take the longer view as soon as we take over in January."
In the long term, Pelosi said a capital-gains tax cut, as pushed by Congressional Republicans, should be considered as part of a 'tax simplification' bill, not a stimulus package. Pelosi did stress, however, that the 'second piece' of the Democratic stimulus agenda should include a tax cut and would be part of a bill moved early next year.
Details have yet to be determined and will depend on further discussions with Obama, the paper said. But the speaker prefers a tax cut over a tax rebate.
Pelosi said a tax cut would have a more immediate impact on the economy, especially if the government speeds dollars into worker paychecks by adjusting tax-withholding tables.
"The impact is faster than a rebate, which takes a few months to get into people's hands," she said.
Obama, the paper said, will meet his top economic advisers in Chicago on Friday, including former Treasury Secretary Lawrence Summers, a top candidate for a second stint at Treasury, former Federal Reserve chairman Paul Volcker, also a candidate, and Robert Rubin, another former Treasury secretary with an outside chance at a return engagement.
Also invited are other advisers who could play roles in the Obama economic team, such as billionaire investor Warren Buffett, Google CEO Eric Schmidt, and former Fed vice chairman Roger W Ferguson.
Those advisers were all named on Thursday to Obama's 17-member transition economic-advisory board. Other members include Time Warner chairman Richard Parsons and Xerox CEO Anne Mulcahy.
Obama economic aides were quoted as saying that the emergency meeting -- and the 'all-star' cast -- was meant to project urgency for a President-elect who knows the economy will be his most pressing issue.