President Bush says an economic stimulus plan of tax rebates and business incentives should start to help the U.S. economy by July. VOA White House Correspondent Scott Stearns has the story.
President Bush says there is no doubt that Americans are feeling the affects of a slowing economy.
"Businesses are being squeezed by high energy prices and high health care prices," said Mr. Bush. "Workers and families are anxious on a variety of fronts, including making mortgage bills and higher prices for food and gasoline. This is a tough time for America."
The president told a meeting of small business owners that America's economy will recover. He said his administration saw the slowdown coming and worked with both parties in Congress on $152 billion in tax cuts to stimulate the economy.
The president signed the economic stimulus plan into law in February, but tax rebates for more than 130 million households will not be received until May. Mr. Bush said that means most of the stimulative affect of the plan should be felt by the start of the third economic quarter in July.
Higher gasoline and food prices are depressing U.S. retail sales. The American economy lost 80,000 jobs in the first two months of the year. Much of the downturn followed the crisis in the U.S. housing market. Many new home buyers got low introductory interest rates but were unable to meet their mortgage payments when those rates went up, leading to a large number of home foreclosures.
Bad investments in securities backed by home loans caused America's biggest bank to lose more than $5 billion in the first three months of the year. Citigroup managers say they will cut costs and fire 9,000 workers.
It is the second major quarterly loss for Citigroup and follows an announcement Thursday that the nation's third-largest investment bank lost nearly $2 billion in the first quarter. Revenue at Merril Lynch fell 69 percent over the past three quarters. The bank says it will cut 3,000 jobs over the next three months.