White House gives dim assessment of economy

The White House on Tuesday, in reaction to a 0.5 percent drop of the gross domestic product in the third quarter, said that things would get worse before they get better.

Spokesman Tony Fratto noted that the economy has slowed since the end of the third quarter in September.

{mosads}“The fourth quarter we know, because of the credit crisis, the standstill in credit as markets froze up and the financial market turmoil, will be significantly weaker,” Fratto said.

He added that, in addition to helping the country transition to President-elect Obama’s administration, jump-starting the economy is President Bush’s top priority.

“What we’ve been focused on is implementing the financial rescue package and the efforts of the Fed to restore growth, to free up credit so that the economy can return to more — more normal practices and get healthy again,” he said.

Obama and Democrats in Congress are working on a massive economic stimulus package that would cost as much as $850 billion. A wide range of economists, including some conservatives, have called for a stimulus, which they argue would make up for the loss of spending by consumers and business.

But House Minority Leader John Boehner (R-Ohio) released a statement in response to the third-quarter GDP numbers that criticized talk of a stimulus.

“This report serves as yet another reminder that Democrats and Republicans must work together in the next Congress to enact reforms that will unleash America’s economic potential and help our economy create jobs,” Boehner stated. “Families and small businesses are facing difficult challenges, and their problems should not be compounded by asking them to pay for up to a trillion dollars in new Washington spending.”