White House's Lazear: No Need For Further Stimulus
U.S. growth showed the economy's resiliency and that there was no need for another stimulus package because the first one was working, senior White House advisers said on Thursday.
"We do believe the effects that we've seen in terms of the stimulus will continue," Ed Lazear, chairman of the Council of Economic Advisers, told CNBC television.
(CNBC sat down with White House Adviser Keith Hennessey, Office of Management and Budget's Jim Nussle, and Council of Economic Advisers's Ed Lazear to discuss the state of the economy. For the full debate, watch the attached videos.)
"There is a lot left to be spent and we expect that to play out in the second half of the year," he said after the government reported second-quarter growth advancing at a 1.9 percentannualized pace from 0.9 percent in the first quarter.
Bush: Economy Has Strong Foundation
Separately, President Bush echoed these comments at a meeting of coal producers, saying the latest economic data showed the foundations of the economy are strong.
"Exports are on the rise. Durable good orders are strong. That suggests that businesses are anticipating a better second half of the year. So I believe the foundations of this economy are strong," Bush said.
He said a report of modest economic growth in the second quarter was "not great news but encouraging news.
"Now it's not as good as we'd like it to be," Bush said. "A few months ago, there were predictions that the economy would shrink in the first quarter, not grow. But in fact the opposite has happened."
Democrats Push for More Stimulus
However, Democrats, say a second government stimulus package is warranted by rising unemployment as the country's housing slump chills growth, but Bush's Republican administration does not agree.
"I think the best reason to have a second stimulus is because we are three months away from an election, not because we've got new economic data," said White House Budget chief Jim Nussle during the CNBC television interview, referring to the U.S. presidential election on Nov. 4.
"I think the politicians are much more concerned about the polls than the economic data," he said.
U.S. growth was revised to show a contraction of 0.2 percent in the fourth quarter of last year, the weakest performance since 2001, but its subsequent recovery was an encouraging sign of its underlying resilience.
"As we went into each quarter this year, the pessimists seemed to have us having negative growth, going into recession; the optimists seem to have won the day," Lazear said.
A pickup in U.S. growth during the second quarter showed that the economy was resilient and that an emergency stimulus package was working, a senior White House adviser said on Thursday.