Posted on 01/15/2008 10:25:54 PM PST by NormsRevenge
WASHINGTON (Reuters) - Democratic leaders in the U.S. House of Representatives on Tuesday began laying the groundwork for an economic stimulus plan of about $100 billion that likely will include tax rebates to help stave off a possible recession.
By early April Congress could enact a plan designed to boost spending by consumers, who account for about two-thirds of the U.S. economy, said Rep. Barney Frank of Massachusetts, following a meeting of senior Democrats with House Speaker Nancy Pelosi of California.
"I think you have to have it passed by early April at the latest...maybe even a little earlier," said Frank, chairman of the House Financial Services Committee. "There's a recognition stimulus has to be done quickly."
High oil prices coupled with a housing crisis and credit crunch have economists and lawmakers worried that the U.S. economy could tip into a recession ahead of the November congressional and presidential elections.
Some economists think the economy may already be in recession. A decline in December retail sales reported on Tuesday signaled that consumers are pulling back on spending, reinforcing fears of a looming recession.
House Ways and Means Committee Chairman Charles Rangel, a New York Democrat, said lawmakers did not get into specifics but generally are talking about a package of around $100 billion.
Pelosi has scheduled a meeting with House Republican Leader John Boehner of Ohio on Wednesday to discuss the stimulus package.
"The serious problems with our national economy require that we meet without delay to discuss a bipartisan response," Pelosi wrote in a letter to Boehner and House Republican Whip Roy Blunt of Missouri requesting a meeting.
Democratic leaders also want to meet with Bush, who returns late Wednesday from a trip to the Middle East, before unveiling a specific package.
But the plan is likely to include a tax rebate, possibly between $250 and $600, to put a lump sum of money into the hands of consumers quickly. Democrats also are looking at extending unemployment benefits for jobless workers.
House Republican Whip Roy Blunt of Missouri said he likes the idea of a rebate of as much as $500, but said some incentives for business purchases also should be included in the package
"We know both of those things work," Blunt told reporters.
Both Democrats and Republicans say they want to work together on the package and avoid the kind of partisan rancor that dominated Congress last year and sank legislation in the closely divided Senate.
"We're looking forward to working with the president and the Senate," Rangel said.
If negotiations succeed, it would help lawmakers overcome public discontent with Congress' inability to work in a bipartisan way.
The Democrats' meeting followed the release of a report by the Congressional Budget Office, which could help shape legislation, that said lawmakers would get more bang for their buck with a well-timed economic stimulus package that moves money into the hands of low-income people most likely to spend it quickly.
"Lower-income households are more likely to be credit constrained and more likely to be among those with the highest propensity to spend," CBO said in the report requested by the Democratic chairmen of the Senate and House of Representatives budget committees.
The CBO, which analyzes the economic impact of legislation, said a well-designed stimulus could help reduce the risk and severity of a recession.
just fantastic.. the congress wants to “fix” the economy. We are doomed.
“Howdy, I’m with tha guvment an I am here to hep youuuu.”
But the plan is likely to include a tax rebate, possibly between $250 and $600, to put a lump sum of money into the hands of consumers quickly. Democrats also are looking at extending unemployment benefits for jobless workers.
House Republican Whip Roy Blunt of Missouri said he likes the idea of a rebate of as much as $500 ....
What an idiocy! As long as it’s OK for Congress is printing new money, why stop at mere $100B. Would not economy benefit thrice as much with $300B in “tax rebates”? What misers, too!
Yes, the economy will surely benefit by giving more unemployment benefits paid for by selling more bonds!
And of course the genius of rebates instead of reduced tax rates is that you completely avoid reducing the structural harm that taxes do to the economy and instead just crowd out private sector investment!
And they get to put the “tax rebate” right back onto the taxpayers credit card, whereas tax rate “cut” and faster tax expensing and amortizing of capex, aka tax incentive to produce, invest and hire, would more than “pay” for itself!
What’s the definition of insanity... “again”?
The stimulus needed is to make the Bush tax cuts permanent, and reduce taxes on wage-earners, period. Giving tax "rebates" to people who don't PAY taxes is B.S.
Bush should tell congress he want them to rescind all the pork barrel spending and return the money to taxpayers as rebates.
How about we cut taxes and seriously cut spending so that we run say a 100 billion budget surplus annually until the national debt is paid off.
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