Fed Chair Bernanke has apparently given some kind of economic stimulus package his approval, clearing the way for Bush to huddle with Congressional Democrats to come up with a plan to goose the economy this election year:

President Bush plans to lay out the principles behind his preferred stimulus today, although he will not provide details.

The leading ideas in the administration are to give rebates of up to $800 to each taxpayer and introduce tax incentives for business investment, but administration officials said no decision has been made on exactly what to do to try to prevent a recession. House Speaker Nancy Pelosi (D-Calif.) said Congress will have a package ready for action by Jan. 28, when Bush delivers his State of the Union address.

House Republicans backed away from their demand that Bush's tax cuts be made permanent, which would have been a deal-killer for Democrats. Some tension between the administration and congressional leaders remained, though, as Senate Majority Leader Harry Reid (D-Nev.) sharply criticized Bush for talking about his stimulus plans prematurely.