Mr Bush said the US needed help but was still strong

Bush statement

He said the growth package would have to be big enough to make a difference to the "large and dynamic" US economy.

Mr Bush said it had to include tax incentives for US business and direct tax relief for the American people.

The package should total at least 1% of gross domestic product, or about $145bn (£74bn), the White House said.

'Shot in arm'

President Bush said the package should be "a shot in the arm to keep a fundamentally strong economy healthy".

"To keep our economy going and creating jobs, Congress and our administration need to work together to enact an economic growth package as soon as possible," he said.

The president said he expected the economy to continue to grow, but at a slower rate than in previous years.

While I am confident in the long term, the short-term risks are to the downside

Henry Paulson

US Treasury Secretary

Bush feels political heat Send us your comments

A US housing market slump and problems in the financial markets have raised fears of a severe economic downturn, with some economists talking about the risk of recession.

The Bush administration has already announced measures to help homeowners struggling to make repayments on their mortgages.

Tax incentives for businesses would help them make new investments and create new jobs, while "letting Americans keep more of their money should increase consumer spending," President Bush said.

Tax relief

Some lawmakers and officials are pressing for a tax rebate of at least $300 per taxpayer, with some lawmakers seeking as much as $800 for per person and $1,600 for families.

At first blush it appears the news is a little less dramatic than people were hoping for

Peter Kenny

Knight Equity Markets

Wall Street bonuses curbed

Speaking after the president, US Treasury Secretary Henry Paulson said the risks of not taking action to stimulate the economy were too high.

"While I am confident in the long term, the short-term risks are to the downside," he said.

Mr Paulson declined to give specific details about the emergency package before talking to Congressional leaders but said a "significant part" would be for ordinary consumers.

"We've done a lot of work. There's strong bipartisan support," he said.

Mr Paulson said the stimulus package could create an extra half a million jobs this year.

Disappointment

US shares turned sharply lower following the announcement, with some market participants saying that Mr Bush's plan did not go far enough.

Economists fear a housing market slump will lead to a recession

Global stock indexes had earlier risen on optimism that the plan would help revive growth in the world's largest economy.

"At first blush it appears the news is a little less dramatic than people were hoping for," said Peter Kenny, managing director at Knight Equity Markets.

The BBC's Mark Gregory says the impact of the stimulus package would be more political than economic.

A stimulus package worth perhaps $140bn dollars will have little real impact on a total US economy worth a gargantuan $14,000bn a year, our correspondent says.

If nothing else it'll make the politicians feel they are doing something and cheer up the voters - and who knows it may even do some good, he says.