Tax rebates could spark economy

WASHINGTON (AP) — Both President Bush and Federal Reserve Chairman Ben Bernanke are supporting calls for an economic stimulus package to avert recession. Bernanke says a plan should be aimed at quickly getting cash into the hands of people.

Testifying to the House Budget Committee, Bernanke said efforts that involve “putting money into the hands of households and firms that would spend it in the near term” would be more effective than other provisions, such as making Bush’s tax cut permanent.

Stopping short of endorsing a specific plan, Bernanke made clear his support for the general concept of an economic rescue package and that it be temporary so that it won’t complicate longer-term fiscal challenges. It is likely that any such package would include tax rebates.

Bernanke forecasts slower growth in 2008 but not a recession.

A White House spokesman spoke of “the softening of the economy,” but would not divulge the details or what the stimulus would look like, other than to say all options are being
considered.

Yesterday, House Speaker Nancy Pelosi and Republican leader John Boehner promised to craft legislation to energize the weakening economy.