The NYT has an article that offers some insight in Whitehouse thinking and wishes.
On one side, according to people familiar with the deliberations, is a powerful group of pragmatists, including Henry M. Paulson Jr., the treasury secretary; Joshua B. Bolten, the White House chief of staff; and Ed Gillespie, counselor to Mr. Bush. They argue that the need for a stimulus is urgent, but have expressed concern that the administration may have to scale back its ambitions for permanent tax cuts to get a package through Congress.
On the other side, these people say, are staunch economic conservatives like Keith B. Hennessey, the new director of Mr. Bush’s National Economic Council. They have reservations about the need for an economic rescue package and maintain that if the White House proposes one, it should use the plan as leverage to press lawmakers into making the tax cuts permanent.
As a whole, the economics team has also drawn criticism for overly optimistic economic predictions. At the end of November, on the same day that Ben S. Bernanke, the chairman of the Federal Reserve, hinted strongly that the Fed would lower interest rates to stave off a downturn in the economy, Mr. Paulson and Mr. Lazear offered a rosier economic forecast for 2008.
Mr. Lazear predicted “solid growth,” and Mr. Paulson said the economy remained “broadly healthy,” while adding, “I expect the expansion to continue.”
On Tuesday, Mr. Lazear defended those predictions, saying they were in keeping with what most economists believed at the time. But he also said that the economic team had known since August, when the housing crisis grew especially acute, that it might have to consider an economic rescue package.
Things seem to change really quickly. Too bad none knew what was coming in order to better plan a stimulus package. [sarcasm off]