By Lori Montgomery
Wednesday, October 21, 2009 5:41 PM

It won't be called stimulus. And it won't cost anything close to $787 billion. But, despite record budget deficits, House leaders plan to pour more cash into piecemeal measures aimed at creating jobs and maintaining a safety net for the unemployed in hopes of preventing a still-fragile economy from lapsing back into recession, House Speaker Nancy Pelosi said Wednesday.

"It is not the plan to put it all in a bill and move forward. Because we do not have plans for an additional stimulus package," Pelosi (D-Calif.) told reporters. "We do have plans to stimulate the economy in the work that we are doing."

Pelosi's remarks, which came after a four-hour meeting where House leaders sought advice from a team of economists, underscore the queasy politics of righting the economy. With budget deficits rising along with the jobless rate, Democrats face the uncomfortable choice of doing nothing heading into next year's midterm elections or digging an already deep budget hole even deeper.

Republicans, seeing a political opening, say the talks prove that President Obama's first attempt at stimulus, a $787 billion package of tax cuts and public spending enacted in February, was a failure. But the five ideologically diverse economists Pelosi summoned to Washington on Wednesday, said that's not true. Combined with the Bush administration's $700 billion bank bailout and actions by the Federal Reserve, Obama's stimulus package successfully halted the economy's slide toward the abyss, the economists said.

But with the unemployment rate at 9.8 percent and rising, Mark Zandi, chief economist for Moody's Economy.com, said "the possibilities of the economy slipping back into recession next year remains uncomfortably high." That makes it "very important for policymakers to remain aggresive and continute to do more," said Zandi, who advised the presidential campaign of Republican Sen. John McCain (Ariz.).

"We've avoided a great depression. But we are still at risk of a great stagnation," said meeting participant Robert Kuttner, co-founder of the liberal American Prospect. "Just about everyone in that room feels that there needs to be more stimulus, and not after the State of the Union [address], but very soon."

Pelosi said the ideas under discussion include extending a number of expiring provisions from the earlier stimulus. The House has already voted to extend unemployment benefits, a measure that has been hung up in the Senate. Democrats are also looking at extending health benefits for the unemployed, higher loan limits for federally backed mortgages and a tax credit for first-time homebuyers that could be offered to "anytime homeowners," Pelosi said.

Pelosi said House Appropriations Committee Chairman David Obey (D-Wisc.) presented her with "an array" of other spending ideas Tuesday night, and that House Transportation and Infrastructure Committee Chairman James Oberstar (D-Minn.) is pushing for more spending on infrastructure. Democrats are also considering new tax breaks for businesses that save or create jobs.

The economists offered several other ideas, including additional aid for cash-strapped states that could be forced to cut jobs or raise taxes in the face of state budget deficits expected to total $350 billion over the next three years. They also called on lawmakers to divert unused and repaid money from the bank bailout to recapitalize community banks, reinvigorate lending to small businesses and provide additional help to homeowners facing foreclosure.

However, the economists cautioned that lawmakers also must quickly begin to chart a course to bring annual budget deficits back into a sustainable range over the next decade. The deficit was $1.4 trillion in the year just ended, and congressional budget analysts predict it will break into the same territory in the year to come.