Washington - House Speaker Nancy Pelosi on Tuesday called for a second economic stimulus package and said President George W. Bush is "in denial" about the U.S. economy, drawing a sharp White House response.

Tax rebate checks are in the mail to millions of Americans under a $152 billion economic stimulus package passed by Congress earlier this year and signed into law by Bush.

"It's clear there is a need for a second stimulus," Pelosi, a California Democrat, told reporters at a news conference.

"The president has for a long time been in denial on the state of the economy," she said.

Bush, backed by fellow Republicans in Congress, has indicated he wants to wait and see how the first stimulus package works before looking at another one.

"I don't think that we have that amount of time," Pelosi said. "There are indications that this downturn is steeper than it was when we created the first stimulus package."

The Bush administration defended its approach. "We have an economic stimulus package in place, and coupled with the response from the Federal Reserve, we expect to see a return to growth in the U.S. economy as the year progresses," said White House spokesman Tony Fratto.

Fratto added, "The speaker knows something about denial -- she has denied a stream of legislation that would help the economy, like trade agreements and housing legislation."

The Institute for Supply Management, a private business group, said in a survey on Tuesday that U.S. manufacturing growth is likely to be marginal this year. At the same time, crude oil set a record high of $122 a barrel.

As Democrats push for a more activist government response to the flagging economy, Pelosi hosted a group of like-minded economists and officials, including former Treasury Secretary Lawrence Summers, at a policy forum.

Afterward, standing beside Pelosi, Massachusetts Democratic Rep. Barney Frank said a major package of housing legislation will be brought to the House floor on Wednesday.

"We will pass a bill tomorrow," said Frank, chairman of the House Financial Services committee. The legislation written by Frank's committee would authorize the government to finance $300 billion in distressed mortgages to help some 2 million American homeowners hit by the housing crisis.

Summers, who served in the Clinton administration, said the U.S. economy faced a difficult outlook.

"The stimulus bill that was enacted by the Congress ... was a very important step," Summers said. "However, since its passage, there have been significant new headwinds: sharp, continuing increases in prices of commodities ... continuing problems in the housing sector."

Summers called for increased unemployment insurance and food stamps and support for state and local governments.

Democratic Majority Leader Steny Hoyer said last week that the House was unlikely to consider a second stimulus bill before the Memorial Day recess.

(Reporting by Kevin Drawbaugh, Jeremy Pelofsky and Richard Cowan; Editing by Kenneth Barry)