As expected, Federal Reserve chairman Ben Bernanke was short on specifics and long on generalities about potential fiscal stimulus packages.

In testimony before the House Budget Committee today, Bernanke said such stimulus programs "might usefully complement monetary policy in supporting economic growth over the next year or so." Few observers expected him to endorse any specific stimulus ideas.

But he added that any such stimulus must be implemented properly in order to have any effect. To be useful, Bernanke said, the fiscal package must be "implemented quickly," so that its effects will be felt in the next twelve months. It should be "efficient," so as to maximize the cost of the package. And it should be "temporary," in order to avoid increasing the government's budget deficit.

Democrats and Republicans are considering legislation to help thwart an economic slowdown and recession. President Bush is expected to announce his plans for fiscal stimulus packages during his State of the Union address on January 28. He is expected to discuss ideas with Senate leaders from both sides of the aisle later today.

In a press conference this morning, a White House spokesman confirmed that Bush believes some stimulus measures are needed. "The president does believe that over the short term, to deal with the softening of the economy, that some boost is necessary," said spokesman Tony Fratto.

While many economists believe that the economy is already in recession, Bernanke said today that the Fed disagrees. He continues to believe that the economy is merely experiencing slower growth.

The Federal Reserve is expected to cut interest rates again when it meets at the end of this month. But a change in interest rates has a long lead time—any changes today will likely not impact the greater economy for another twelve months.

Fiscal stimulus packages, such as tax rebates or unemployment-benefit extensions, can provide an immediate boost to consumers and businesses that a change in monetary policy cannot. While Democrats and Republicans appear to be in agreement that some fiscal measures must be implemented, they tend to disagree on the details of how to do it.

Bernanke believes that any package should include a "diversified mix" of programs in order to balance the risk in case any single measure does not have enough impact on spending.