Stimulus or no stimulus? Several reports this morning indicate that the White House is considering a second “emergency economic stimulus

· Stimulus or no stimulus?  Several reports this morning indicate that the White House is considering a second “emergency economic stimulus”; among the items under consideration are an extension of the R&D tax credit and new infrastructure spending (a separate Bloomberg article this morning says payroll tax relief is also being considered).  The Washington Post says that Obama is “considering another big dose of stimulus in the form of tax breaks for businesses”. 

The White House continues to downplay these reports and isn’t saying how much any new package would be worth this could be dangerous to the current rally because if the market is pricing in a stimulus package which doesn't meet its expectation we will reverse course from the last three days; officials in the White House emphasize that the plans don’t amount to a “second stimulus” (WH press sec Gibbs on Thurs emphasized to reporters that no new stimulus plan is in the works). 

The president has mandated his team to come up w/ideas that don’t add to the deficit. Leaders of the house and senate are skeptical that a major package wouldn't be able to pass and imagine if we are in the same situation we are in now when the elections are over and the Republicans take back control of the congress. This would very difficult to get any emergency stimulus passed.

Note that Obama will be holding a press conf on Sept 10 and may have more to reveal then (the NYT says “Obama to focus again on economy” – will make series of speeches next week and then has his first press conf since May on Fri).  Politico/Washington Post/Bloombergn