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Bush wants americans to spend money { March 2008 } Original Source Link: (May no longer be active)
http://www.ajc.com/news/content/shared-gen/ap/Finance_General/Bush_Economy.html?cxntlid=inform_artrBush has suggested the rebates could trigger a spending spree. "When the money reaches the American people, we expect they will use it to boost consumer spending," he said last month.
http://www.ajc.com/news/content/shared-gen/ap/Finance_General/Bush_Economy.html?cxntlid=inform_artr
Bush says rebates going out Monday will boost economy
By TOM RAUM
Associated Press Writer
WASHINGTON — President Bush said tax rebates will start going out Monday, earlier than previously announced, and should help Americans cope with rising gasoline and food prices, as well as aid a slumping economy.
Democrats said they were glad the rebate checks were about to go out, but suggested that multinational oil companies were not among the businesses the stimulus package was originally designed to help.
"Starting Monday, the effects of the stimulus will begin to reach millions of households across our country," Bush said Friday in remarks on the South Lawn of the White House.
Those first rebates will be directly deposited into people's bank accounts. The Internal Revenue Service had been saying direct deposits wouldn't start until next Friday. Bush said paper checks would begin going out on May 9, a week earlier than previously announced.
"The money is going to help Americans offset the high prices we're seeing at the gas pump, the grocery store, and also give our economy a boost to help us pull out of this economic slowdown," Bush said.
Bush's emphasis on fuel and food prices differed from other comments he's made since signing the economic stimulus legislation, intended to aid the economy by boosting overall consumer spending — which accounts for roughly two-thirds of the nation's economic activity.
Bush has suggested the rebates could trigger a spending spree. "When the money reaches the American people, we expect they will use it to boost consumer spending," he said last month.
By saying expressly that people could use these one-time checks to pay for such necessities as food and gas, Bush underscored the deepening challenges facing the economy.
Democrats were quick to pick up on the change of focus.
"It's galling to think that taxpayers' stimulus checks will be lining the pockets of OPEC. The sad truth is that the average American family will spend almost their entire stimulus check on higher gas prices this year," said Sen. Charles Schumer, D-N.Y., chairman of the Joint Economic Committee of Congress.
OPEC is the Organization of Petroleum Exporting Countries.
"Unless the administration gets OPEC to increase oil supply, American consumers are going to be in for a scorching summer of $4 gasoline with no relief in sight," Schumer said.
House Speaker Nancy Pelosi, D-Calif., agreed that people "need this rebate to cope with the rising cost of gas and groceries." She said that, while the rebates would help to get the economy moving, there was a need for a second stimulus package "and we have begun some conversation with the administration and Republicans."
As he had earlier in the week, Bush used the word "slowdown" to describe the state of the economy. He has denied that the nation is in a recession, although many economists say it is.
"It's obvious our economy is in a slowdown. But, fortunately, we recognized the signs early and took action," Bush said.
The rebates — up to $600 for an individual, $1,200 for a couple and an additional $300 for each dependent child — are the centerpiece of the government's $168 billion stimulus package, enacted in February. Roughly 130 million households are expected to get them.
Bush made the comments before boarding his helicopter at the start of a day trip to Connecticut.
People must file a tax return for their 2007 income to be eligible for a rebate check.
The IRS now says all checks for those who filed tax returns on time are scheduled to be deposited or mailed by July 11.
The economy — burdened by the collapse of home prices, a financial and credit crisis, and now rising energy and food prices — grew at an anemic 0.6 percent in the final three months of last year and is believed to have gotten even weaker in the first three months of this year.
The government will report on the first quarter's performance next week.
With the economy faltering, the nation's unemployment rate has climbed to 5.1 percent, the highest since September 2005, when it suffered from the devastating blows of the Gulf Coast hurricanes. Job losses in the first three months of this year neared the quarter-million mark.
Foreclosures have surged to record highs and financial companies have taken multibillion losses on mortgage investments that soured. The situation has sent a tremor through Wall Street and has sent the administration, Congress and presidential contenders looking for ways to provide relief.
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AP Economics Writer Jeannine Aversa contributed to this report.
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April 25, 2008 - 5:41 p.m. Copyright 2008, The Associated Press. The information contained in the AP Online news report may not be published, broadcast or redistributed without the prior written authority of The Associated Press.
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