Mr. Bush is scheduled to spell out his criteria for the stimulus package in a speech on Friday at a manufacturing company in Frederick, Md.  Senator Harry Reid of Nevada, the Democratic majority leader, said it was “encouraging that the president has acknowledged the economic problems challenging our nation.” But he complained that Mr. Bush seemed to be following a go-it-alone approach that could “unnecessarily politicize the inevitable bipartisan negotiations” that will be necessary.  The House minority leader, Representative John A. Boehner, Republican of Ohio, told reporters earlier in the day that the package could cost $100 billion to $150 billion, but said there was “no firm number” yet for an “upper limit,” Reuters reported.  Although Mr. Bernanke tried to steer his questioners away from the word “recession,” he conceded in an exchange with Representative John M. Spratt Jr., the South Carolina Democrat who heads the panel, and Paul Ryan of Wisconsin, the ranking Republican, that the economy is being battered by an unusual and unsettling combination of problems, and that growth will probably be slower in 2008 than last year.  Turmoil in the financial markets, rapid increases in oil prices and a badly slumping housing market are part of “a confluence of different events that makes this a difficult combination of circumstances,” Mr. Bernanke conceded.  The chairman said any stimulus package should be “explicitly temporary,” aimed at getting people to spend more in the next year or so without creating a heavy new load of national debt.  “We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks,” Mr. Bernanke said, alluding to interest-rate cuts.  When he was asked whether he thought the “temporary” tax cuts, pushed through Congress several years ago when Republicans were in control, should be made permanent, Mr. Bernanke said he preferred not to take a stand on any specific tax or spending measure.  The chairman acknowledged concerns about the latest employment figures, and said the labor market “will bear close attention.” And while he forecast a “healthy” growth in American exports, he said “the financial situation remains fragile” at home, with the depth of losses among banks and other lending institutions not yet known.  And while Mr. Bernanke rejected the term “recession” for the present conditions and what lies ahead, he said the full effects of the housing slump and the accompanying mortgage mess had yet to be felt.  “Our expectation is that delinquencies will go higher and that there will be ongoing losses in the subprime area,” he said. Asked to put a dollar figure on total losses, he said, “I see so far about $100 billion, but it certainly could be several multiples of that as we go forward and the delinquency rates and foreclosure rates rise.”  Mr. Bernanke said that whatever action Congress takes should be designed as a quick jolt to revive a languishing economy, and that measures like spending on infrastructure or long-term tax relief, which might take months or years to be felt, would be counterproductive.  “Stimulus that comes too late will not help support economic activity in the near term, and it could be economically destabilizing if it comes at a time when growth is already improving,” Mr. Bernanke said.  While he reiterated the Fed’s usual concerns about the need for vigilance against inflation, he said that inflationary pressures should ease this year and next, as long as the public’s confidence in the Fed is not shaken.  As Congress considers what kind of stimulus package to pass, some Democrats have spoken about jobs programs or public spending as well as quick tax rebates or extended unemployment compensation, while some Republicans have emphasized making tax cuts permanent.  The Fed’s willingness to give a nod to fiscal stimulus is important. Many lawmakers will not support action without the chairman’s blessing, and the double dose of stimulus that the Fed and Congress are considering must be carefully calibrated.  If Mr. Bernanke opposed Congressional action on the ground that spending increases and tax cuts would increase the budget deficit, the Fed might restrain its own effort to stimulate the economy with lower interest rates.  Mr. Bernanke’s advice appears to be not to do too much too late.  “Fiscal measures that involve long lead times or result in additional economic activity only over a protracted period, whatever their intrinsic merits,” he said, might well not provide stimulus when it is most needed.  Faced with growing evidence that the economy is slipping into a recession, Congressional Democrats and Mr. Bush are trying to come up with a package that would put more money in Americans’ hands within the next few months.  As the president was preparing to convene a conference call with Congressional leaders on Thursday afternoon to talk about the economy, the White House affirmed that it saw a need for a short-term economic stimulus package.  “The president does believe that over the short term in the economy that some boost is necessary,” said Tony Fratto, deputy White House press secretary. “That’s where his inclination is.”  He said that Mr. Bush wanted to hear the views of Congressional leaders, but he did not characterize the conference call as a negotiating session.  Mr. Bush, due back in the Oval Office on Thursday after a Middle East trip, is expected to make a stimulus package the centerpiece of his State of the Union address.  The tax cuts passed early in his administration are set to expire at the end of 2010. The president has said that he will work in his final year to make them permanent.  In his comments on Thursday, Mr. Bernanke said that any stimulus program “should be explicitly temporary,” in part to avoid adding to the federal government’s structural budget deficit which would make it far harder, he said, for the nation to deal with long-term challenges associated with the aging of the population.  Mr. Bernanke portrayed a mixed economic picture of the financial turmoil prompted by the subprime mortgage crisis, high energy and food prices, and other factors.  New data, he said, suggested that “the baseline outlook for real activity in 2008 has worsened and that the downside risks to growth have become more pronounced.” Key factors, he said, were continuing increases in energy prices, lower equity prices and a softening of home values.  But some economic boost should come from abroad, Mr. Bernanke said.  Outside the United States, he said, “economic activity in our major trading partners has continued to expand vigorously. U.S. exports will likely continue to grow at a healthy pace in coming quarters, providing some impetus to the domestic economy.”  In addition, he said, futures markets pointed to deceleration in food and energy prices over the coming year.  “Given these factors,” Mr. Bernanke told the committee, “overall and core inflation should moderate this year and next, so long as the public’s confidence in the Federal Reserve’s commitment to price stability is unshaken.”  “However,” he went on, “any tendency of inflation expectations to become unmoored or for the Fed’s inflation-fighting credibility to be eroded could greatly complicate the task of sustaining price stability and reduce the central bank’s policy flexibility to counter shortfalls in growth.”  Edmund L. Andrews, David M. Herszenhorn and Sheryl Gay Stolberg contributed reporting.
Ben S. Bernanke endorsed quick passage of a stimulus package and aggressive action by the Fed, but said that a recession is probably not on the horizon.