Business | Investment
Bush signs fiscal package to jumpstart US economy
More than 130m Americans are expected to get tax rebates. More than 130 million people are expected to get the rebates.
- AP
- Published: 00:30 February 15, 2008
Washington: President George W. Bush has signed legislation to put spending money into the pockets of millions of Americans in an effort to give the sagging US economy a "booster shot".
Rebates are to go out beginning in May to taxpayers and low-income people. Businesses would get tax breaks for investing in new plants and equipment.
"I know a lot of Americans are concerned about our economic future," Bush said on Wednesday. "Our overall economy has grown for six straight years, but that growth has clearly slowed."
More than 130 million people are expected to get the rebates. Congress, Bush, the Federal Reserve and Wall Street are hoping the money will burn such a hole in people's pockets that they won't be able to resist spending it. And the spending is supposed to give an energising jolt to a national economy that is in danger of toppling into a recession.
Whether people actually spend the money remains to be seen. A recent Associated Press-Ipsos poll indicates most people have other plans. Forty-five per cent said they planned to pay off bills, while 32 per cent said they would save or invest it. Only 19 per cent said they would spend their rebates.
The $168 billion rescue package is expected to help bolster US economic activity. The package also contains provisions aimed at helping struggling homeowners clobbered by the housing collapse and the credit crunch refinance into more affordable mortgages.
The emergency plan marked a rare moment of cooperation among political rivals fearful that an ailing economy during an election year would invite voter retaliation.
Bush, who called the measure "a booster shot for our economy," praised the bipartisan cooperation. "We have come together on a single mission - and that is to put the people's interests first," he said.
The Bush administration and some private econ-omists are hopeful the rebates, tax breaks and aggressive interest rate reductions by the Federal Reserve will help the country narrowly dodge a recession.
An increasing number of economists, however, believe the country has already fallen into its first recession since 2001, and they are simply hopeful the rescue package will limit the damage. Most people - 61 per cent - say the economy is now in a recession, according to the AP-Ipsos poll.
"I do think this will give the economy a shot of adrenaline," said Stuart Hoffman, chief economist at PNC Financial Services Group.
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