United States (U.S.) President George W. Bush and Federal Reserve Chairman Ben Bernanke yesterday embraced calls for an economic stimulus package to avert recession in the U.S.

Bernanke said such a plan should be quickly implemented and temporary so that it won't complicate longer-term fiscal challenges.

The Fed chief, in testimony to the House Budget Committee, said efforts that involve "putting money into the hands of households and firms that would spend it in the near term" would be more effective than other provisions, such as making Bush's tax cut permanent.

While shying away from endorsing a specific plan, Bernanke made clear his support for the general concept of an economic rescue package. It is likely that any such package would include tax rebates.

Bernanke forecast slower growth in 2008 but not a recession.

When asked by lawmakers about the potential economic effect of a fiscal stimulus package totaling around $100 billion (€68.1 billion), Bernanke said that the economic effects could be "significant" and not "window dressing."

At the White House, spokesman Tony Fratto said, "The president does believe that over the short term, to deal with the softening of the economy, that some boost is necessary."

That marked the first White House confirmation that Bush, confronting a deepening economic crisis that has shaken much of the nation, supports government intervention.

Until now, the White House said the president was just considering some type of short-term boost.

- AP