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Congress weighs another stimulus

But this plan is likely to be aimed at people and areas hit hard by the slump.

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With the economic outlook getting darker by the day, it looks increasingly likely that Congress will provide the economy with a flashlight.

A new stimulus package can't chase away the economy's gloom on its own. But after Fed Chairman Ben Bernanke endorsed the idea Monday, Congress has begun to seriously consider the outlines of a new economic boost.

"Momentum is building," says Rep. John Spratt (D) of South Carolina, chairman of the House Budget Committee. "The White House says it's negotiable and we know we need to do something."

What Congress ends up doing, says Mr. Spratt, is not likely to be a replay of this spring, when the US Treasury sent consumers about $100 billion in tax-rebate checks. Some economists question the effectiveness of that stimulus – a significant chunk went to pay down debt or into savings. It appears any new spending will be more targeted to people or areas of the economy that are suffering.

Spratt expects any new spending program to have three components:

•The extension of unemployment benefits and possibly food stamps from 39 to 52 weeks.

•A boost in infrastructure spending, despite the problems of getting the money to work quickly.

•Some relief for state and local governments facing tighter budgets because of lower tax receipts and rising Medicaid costs.

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