John W. Schoen Senior Producer • Profile • E-mail

With economic forecasts calling for bad weather ahead, Congress and the White House have turned attention to proposals to offer Americans some shelter from the storm.

There’s no shortage of ideas in an election year. But it remains to be seen just how much the government can do to halt the continued slide in an economy battered by falling housing prices, rising energy costs and a lending slowdown caused by worries about how many more loans will go bad.

There’s little doubt the U.S. economy is slowing sharply. Economists are divided on whether the U.S. is headed for recession or already in one. But in just the past few weeks, the latest economic data have gotten worse.

The debate over a potential stiumuls package centers on what measures — if any — will have an impact.

Lawmakers have been giving the issue a high profile this week on Capitol Hill. On Tuesday, House Speaker Nancy Pelosi, D-Calif. Met with Fed Chairman Ben Bernanke talk about various legislative proposals to help bolster the Fed’s rate-cutting moves to get the economy moving again. On Wednesday, former Treasury Secretary Lawrence Summers told a hearing of the Joint Economic Committee that Congress should pass an economic stimulus bill of up to $150 billion.

"The risks here of 'too little, too late' are far, far, far greater than the risk of 'too much too soon,"' Summers told the panel.

Pelosi and Minority Leader John Boehner, R-Ohio, are scheduled to meet later Wednesday to try and lay the groundwork for a consensus on what measures should be enacted. Bernanke testifies before the House Budget Committee Thursday.

But Congress has a mixed track record when it comes to passing legislation to prop up a sagging economy, according to former Federal Reserve Gov. Lyle Gramley.

“The main reason is that it takes so long to get something passed through Congress that once it kicks in, the recession is over,” he said.

Economic stimulus generally comes from two government sources. The Federal Reserve can lower interest rates — as it has been doing since September — to promote borrowing and spending. And Congress and the White House can lower taxes or boost spending to provide an added jolt.

There’s widespread agreement that the Fed will have to do the heavy lifting to reverse the current downturn, and more rate cuts are all but certain. But those rate cuts can take months to work their way through the system and get the economy growing again.

Tax cuts or spending increases could work more quickly, said Chad Stone, chief economist at the Center on Budget and Policy Priorities, a think tank that focuses on low- and moderate-income families. But Congress and the White House are only now getting around to such fiscal measures, even though the housing recession and credit crunch have been under way for months.

Now, the political pressure to act is rising. With economic data increasingly pointing to a downturn, voters are getting more worried about a recession. Some 47.5 percent of those surveyed think a recession is likely in the next year, up from 43.4 percent in the previous month's surveyaccording to a Reuters/Zogby poll released on Wednesday.

And with the election season is in full swing, there is no dearth of proposals about what the government could do.

Republicans generally favor tax cuts and are trying to steer the discussion to the renewal of Bush administration tax cuts that are set to expire in 2010. Democrats have proposed a variety of measures to put money in consumers’ hands, including extended jobless benefits, higher food stamp payments, and aid to cash-strapped states to offset budget cuts. Another possibility is a one-time tax rebate.

On Tuesday, the Congressional Budget Office weighed in with a report saying that tax rebates like those paid out to soften the recession of 2001 are among the more cost-effective measures Congress could enact. The report also said rebates are more effective when given to middle- and lower-income taxpayers who are more likely to spend it, rather than wealthier taxpayers.

"When the economy is weak, the key impediment to economic growth is how much demand there is," said CBO director Peter Orszag. "And from that perspective what you want to do is get money to people who are going to spend it really fast."

MORE FROM TECHNOLOGY & MONEY

Technology & Money Section Front

Survive the drive! Great gear for kids The PC gets more personalized Credit squeeze hits college students, families Great tech for a 10-second commute 5 tips to combat financial stress Click to save! Retail sales loom online Your Career: Where can I snag a good job abroad? Answer Desk: How far will gas prices fall? Is this legal? 6 housing questions answered Do you have a real-estate question? Technology & Money Section Front   Add Technology & Money headlines to your news reader: