Second Stimulus Needed?

Rumors have swirled in the past week that the Obama administration is considering a second economic stimulus package.

CBS News Congressional correspondent Nancy Cordes reported on "The Early Show" Wednesday, that though the vice-president and democratic leaders deny any plan for a second package, insiders say they're talking about it.

But do we need it?

Cordes reported the unemployment rate has hit 9.5 percent -- the highest in 26 years. And analysts, Cordes said, predict it could get worse -- perhaps going into the double digits by the end of the year.

"We're not doing as well as many economists predicted or the administration hoped," Peter Morici, an economist at the University of Maryland, told CBS News. "We're going have a recovery, but it's going to be later in the year, and it's not gonna be terribly strong."

That recovery will depend in part, Cordes said, on how well President Obama's economic stimulus package does. Cordes reported experts say it's too early to tell. But, she said, that hasn't stopped some economists from suggesting a second stimulus might be necessary.

Stocks fell Tuesday, Cordes said, after one of the president's own economic advisors said the U.S. should be planning for another stimulus.

And the response from republicans?

Ky. republican Sen. Mitch McConnell told CBS News, "Why in the world there would be any conclusion reached after looking at the results of the first stimulus, that the way to deal with that is to pass yet another one, is mind-boggling."

On "The Early Show, Cordes said democrats counter it's too soon to measure the success of the stimulus bill because only a little more than 10 percent of the money has been distributed.

CBS Moneywatch.com's Jill Schlesinger said on "The Early Show" she's viewing the midyear analysis mindful that the country still has a way to go before the economy is sound once more.

"I look at this like the doctor comes in and says there's great news, 'You don't need a heart transplant, however, you do need a quadruple bypass," ' she said. "We are away from the worst case scenario...It's a great thing we stepped away from that precipice but that does not mean we are out of the woods. We are still in the midst of a deep and painful recession. We're right in it."

And though job loss has tapered off in recent months, Schlesinger said the current figures for unemployment are still terrible.

Schlesinger added she'd like to see the housing market find its footing.

"We need housing to stabilize for this economy to start growing again," she said. "It doesn't have to go up. It just has to stop going down."

Schlesinger said she's still worried about the banking system, citing that 52 banks have failed this year, in contrast to only 25 last year.

She said, "I don't feel like the worst is over in banking."

Schlesinger's suggestions for weathering the recession:

1) Live within your means
2) Pay down consumer debt
3) Maintain 6 months in emergency reserves (the average job search is 22 weeks)