The Bush administration and House leaders today announced an economic stimulus package estimated at $150 billion. It still must receive House and Senate approval and be signed into law by President Bush. It has two main components:
Tax rebates. The biggest component is made up of tax rebates to Americans who earned at least $3,000 in 2007. Individuals who pay federal income taxes would receive $600 checks in the mail, and married couples who file jointly would receive $1,200. Those who do not pay any federal income taxes but make more than $3,000 would receive $300 for individuals and $600 for couples.
When would Americans actually see this money? Treasury Secretary Henry Paulson said that the government could begin making payments "within roughly 60 days of enactment" and be "done in something under 10 weeks." The Associated Press reports that rebates could be in the mail in June, but Bernard Baumohl of the Economic Outlook Group predicted that July or August is more likely due to delays with the Internal Revenue Service. "It's not like the IRS has little else to do this time of year," he said, alluding to the need to process millions of income tax refunds.
Incentives for business. The second component is about $50 billion in tax incentives aimed at encouraging businesses to invest. These provisions would include a 50 percent write-off of capital equipment purchased this year and a $200,000 deduction for equipment purchased by small businesses. Baumohl was skeptical of these provisions, saying "business leaders are being understandably cautious, holding back major spending projects until they get a clearer idea of where the economy is headed."
Still up for debate. Conspicuously missing from the package was a proposal pushed by Democrats to increase unemployment benefits. That omission may be a point of contention with some in Congress. On whether or not new provisions will be added, Paulson said, "The American people are not going to have a lot of patience for taking time. We owe the American people speed, and we owe them a policy that's going to work." He said he was open to the Senate's involvement in shaping the package but added: "I think what we've got is great."