Some experts are suggesting that the slumping economy may require another round of stimulus spending. MoneyWatch.com's Jill Schlesinger says we're off the precipice, but we're still in a deep, painful recession.
>> Harry Smith: It is a whisper that's not exactly growing into a scream, but it is getting a little louder in some parts of Washington, that we may need a second stimulus package. But despite the still slumping economy, Republicans are saying that simply is not the right answer. CBS News correspondent, Nancy Cordes, is in Washington and has more. Good morning, Nancy.
>> Nancy Cordes: Good morning, Harry. A stock market slide Tuesday set off a fresh round of worries over the economy, with lawmakers split over what to do about it.
>> Frank Doyle: What'd you get today?
>>
Speaker: Inaudible sandwich.
>> Frank Doyle: Excellent.
>> Nancy Cordes: It's been a tough 12 months at the Portopiraues phonetic Restaurant in Washington D.C.
>> Frank Doyle: This was the worst year we've ever had in business.
>> Nancy Cordes: For three months, owner Frank Doyle put aside a paycheck and lowered his prices.
>> Frank Doyle: Thank you. Have a good afternoon.
>> Nancy Cordes: That's helped him stay in business, but around the country, others haven't been so lucky. The unemployment rate has hit nine and a half percent, the highest in 26 years. And analysts predict it could get even worse, going into the double digits by the end of the year.
>>
Speaker: We're gonna have a recovery, but it's gonna be later in the year, and it's not going to be terribly strong.
>> Nancy Cordes: That recovery will depend in part on how well President Obama's economic stimulus package does. Experts say it's too early to tell, but that hasn't stopped some economists from suggesting a second stimulus package might be needed. Stocks fell Tuesday after one of the President's own economic advisors said the U.S. should be planning for another stimulus. The response from Republicans? "No way."
>>
Speaker: Why in the world there would be any conclusion reached after looking at the results of the first stimulus that they way to deal with that is to pass yet another one is mind-boggling.
>> Nancy Cordes: Democrats counter that it is way too soon to measure the success of the stimulus package because only about 10 percent of the money has actually gone out the door. They acknowledge that pace has to pick up, but many of them, Harry, are not sold on this notion of a second stimulus either.
>> Harry Smith: All right. Nancy Cordes in Washington this morning. Thank you so much. Jill Schlesinger is editor-at-large for CBS Moneywatch.com. There really has been a lot of sort of mid-year sort of analysis, and you pick up different papers and some are bleak, some are less bleak, some are a tiny bit optimistic, some say there are green shoots. How do you view all of this so far?
>> Jill Schlesinger: I look at this like the doctor comes in, he says, "There's great news. You don't need a heart transplant. However, you do need a quadruple bypass. So we are away from the worst-case scenario, and I think that's really important. It was a great thing that we stepped away from that precipice.
>> Harry Smith: Right.
>> Jill Schlesinger: But that does not mean we're out of the woods.
>> Harry Smith: Right.
>> Jill Schlesinger: We are still in the midst of a deep and painful recession. We're right in it.
>> Harry Smith: I mean, unemployment numbers came out last week. We're still up in the three, four, five hundredth. That is -- the economy is still hemorrhaging jobs like crazy.
>> Jill Schlesinger: Job loss is tapering off, which means that, okay, you didn't lose 700,000 jobs like in January, but you're right. The number last month was terrible. The number I really was disappointed in that report was this other number, which says if you put all the part-time people in-
>> Harry Smith: Um-hum.
>> Jill Schlesinger: --And those who are disgruntled, 16.5 percent unemployment rate. That is why it's so hard to get a --
>> Harry Smith: That's a more real unemployment figure.
>> Jill Schlesinger: And it really helps people understand, "Why's it so hard for me to get a job?
>> Harry Smith: Although in some of the other areas, you look at some places in the country where the housing prices seemed to have bottomed out, and there actually is a little bit of an up tick. There's speculators getting back in. There are first-time homebuyers. There seems to be -- it's not exactly traction, but at least something's under foot.
>> Jill Schlesinger: Again, a little bit more stabilization in housing. We need housing to stabilize for this economy to start growing again. It doesn't have to go up.
>> Harry Smith: Right.
>> Jill Schlesinger: It just has to stop going down.
>> Harry Smith: Sure.
>> Jill Schlesinger: That hasn't happened just yet.
>> Harry Smith: What about things like manufacturing and those really sort of traditional things you look at and say, "Ah, we're actually heading forward?"
>> Jill Schlesinger: Okay. Manufacturing numbers have actually been better. That's been good.
>> Harry Smith: Um-hum.
>> Jill Schlesinger: The one area that I -- still concerns me is banking. I don't feel like the worst is over in banking. We have -- 52 banks have failed this year. Only 25 in all of last year.
>> Harry Smith: Jill, as always, thank you so much, do appreciate it.
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