The president said the package “must be big enough to make a difference” in an economy as huge as that of the US, meaning it should be worth about 1 per cent of the gross domestic product. “This growth package must be temporary and take effect right away,” Bush said. The president said treasury secretary Henry M Paulson Jr would work with Congressional leaders to get a bipartisan relief package ready as soon as possible.

“Letting Americans keep more of their own money should increase consumer spending,” the president said, repeating a theme he has embraced time and again during his presidency, although perhaps never when, in the opinion of many analysts, the economy was teetering on the brink of recession.

There was speculation beforehand that the relief package would amount to $800 rebates for individual taxpayers and $1,600 for households. Based on the $140 billion to $145 billion range of the entire package, it appeared that the rebates would not exceed $800 and $1,600.

The president called again for Congress to make the tax cuts permanent that were enacted several years ago and are to expire in the next three years. Otherwise, he said, there will be such uncertainty that jobs and economic growth will be jeopardised. But the president did not insist on getting his way as a condition of negotiations on short-term relief.

“We’re in the midst of a challenging period,” Bush said at the White House, with members of his economic team flanking him. But he said the US economy remains remarkably resilient and has overcome big challenges before.

In a conference call with Democratic leaders on Thursday afternoon, Bush signaled his eagerness to reach agreement. “I think there was a collective sense that there was no reason why we can’t get something done quickly,” said Tony Fratto, the White House deputy press secretary.

Stocks on Wall Street rebounded early on Friday from their precipitous fall on Thursday, a 3 per cent drop despite reassuring words by Federal Reserve chairman, Ben S Bernanke, and an emerging consensus about the stimulus plan, which many worry could be too late.

In early trading on Friday, the Dow Jones industrial average rose more than 170 points on a strong outlook from IBM, before falling below 100 points. Until Friday, stocks had been dropping dramatically as data showed that the housing debacle was getting worse and beginning to bring down the rest of the economy.

Despite Bernanke’s comments on Thursday that a recession could be averted, by the end of the day, the Dow had plunged 307 points; the fall since January 1 is now 9.2 per cent. Adding to the pessimism were reports that manufacturing activity could be slowing even more than analysts had expected, and that housing starts dropped 14 per cent last month and reached their lowest level in 16 years.

Bernanke insisted that despite concerns about “slowing growth,” the economy remained “extraordinarily resilient.”

But James W Paulsen, a strategist at Wells Capital Management, reflected the view of many investors that help from Washington would come too late. “By the time they actually pass anything, it will be past the time we need it,” Paulsen said.

Democratic leaders said they were hopeful about reaching a deal in a few days, but they could end up feuding with Bush over who should benefit most from the stimulus measures. Democrats are drafting a package that would cost about $100 billion and is likely to include one-time tax rebates for workers, expanded unemployment benefits and other measures aimed at middle-income and low-income people who are most likely to spend any extra money immediately.

Bush and many Republican lawmakers have argued that any stimulus measure has to include incentives for businesses to spur job creation.

Whatever the merits of that move might be, he told lawmakers, the Bush tax cuts were a matter of long-term fiscal policy that should not be entangled with a short-term stimulus program.