US President George W. Bush signed a 168-billion-US-dollar
economic rescue package Wednesday to fend off a possible economic
recession.
"I know a lot of Americans are concerned about our economic
future. Our overall economy has grown for six straight years -- but
that growth has clearly slowed," Bush said at a White House signing
ceremony.
He hailed the cooperation between the White House and Congress,
saying, "We have come together on a single mission, and that is to
put the people's interest first."
The stimulus plan was achieved after he held talks with leaders
of Congress last month about "whether or not we could come together
to provide a booster shot for our economy -- a package that is
robust, temporary, and puts money back into the hands of American
workers and businesses," Bush said.
According to the stimulus package, individuals who pay income
taxes would get up to 600 dollars, working couples 1,200 dollars
and those with children an additional 300 dollars per child.
Workers who make at least 3,000 dollars but do not pay taxes
would get 300-dollar rebates.
Those making more than 75,000 dollars and couples with income
exceeding 150,000 dollars are to get smaller rebates, 50 dollars
less per 1,000 dollars they make over those thresholds.
As an incentive to encourage business investment, companies
would be able to immediately deduct 50 percent of the costs of
purchases of new equipment.
The package will inject nearly 152 billion dollars into the
economy this year and more than 16 billion dollars in 2009.
Taxpayers will not have to apply for the rebate, and it would
come automatically based on their 2007 tax return.
The Bush administration said the package will provide tax
rebates to 128 million American households and that the first
checks should arrive in mailboxes in May.
In addition to the stimulus package, the Federal Reserve has
slashed interest rates to 3 percent from 5.25 percent since
mid-September to try to boost the spending and investment, helping
bolster the economic growth and calm down the turbulence in the
financial market.
The US economy grew at an annual rate of just 0.6 percent in the
final quarter of 2007, down sharply from the 4.9-percent pace in
the previous quarter.
That has led many economists to forecast that the United States
will slip into a recession, and some have said it may already be in
one. But the Bush administration and the Federal Reserve have
steadfastly denied that would happen.
Many economists said the stimulus package and interest cut will
give the economy a much-needed boost in the middle of this year,
but some others said the actions are too little and too late.
"I do think this will give the economy a shot of adrenaline,"
said Stuart Hoffman, chief economist at PNC Financial Services
Group.
"The stimulus will have the effect of increasing jobs by about
half a million above the number that would have been the case in
the absence of that," predicted Edward Lazear, chairman of the
White House Council of Economic Advisers.
However, surveys showed that a majority of consumers said they
will save the tax-rebate money, or use it to pay down debts, while
only a minority of consumers said they will spend the rebate
checks.
To be an effective short-term stimulus to the economy of this
year, the money would have to be spent.
When the US government sent out rebates in 2003, consumers only
spent less than a third in the first six months, and about
two-thirds within the first year, according to findings by the
University of Michigan Survey of Consumers, U.S. media
reported.
After rebates were sent out in 2001, some 22 percent said they
would mostly spend them, rather than saving the money or using it
to pay off debts, and only one-third of the rebate was spent in the
short run, according to the same study.
Democrats also endorsed the rescue package, but adding that the
Bush administration should do more to fend off a possible
recession.
"We have much more to do in the long term because many more
Americans still need our help. We will continue fighting for those
who have lost their jobs in the Bush economy and small businesses
suffering in a looming recession," Senate Democratic Majority
Leader Harry Reid said in a statement.
"We will fight for families struggling with rising energy prices
and a national housing crisis. And we will fight to reverse
President Bush's disastrous budget policies that have hurt the
middle class," he said.
(Xinhua News Agency February 15, 2008)
