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January 23, 2008

Bush, Congress close to a deal on 'Stimulus Package'

Rick Moran
It's an election year and there are fears of a recession.

This deadly combination has led to the White House and Congress putting their heads together to come up with what they are calling a "stimulus package" which they believe will keep us out of a recession:

As markets roiled from a sharp sell-off around the world and the Federal Reserve cut interest rates at home, Bush met with House and Senate leaders to work out a package of tax breaks for consumers and businesses.

In an important concession to Democrats, Treasury Secretary Henry M. Paulson Jr. signaled that he is open to including breaks even for those who pay little to no income taxes. Paulson plans to open formal talks on the details of the package this morning, and Senate leaders agreed to defer to House Speaker Nancy Pelosi (D-Calif.) and House Minority Leader John A. Boehner (R-Ohio) as chief negotiators.

But officials said they were close to the framework of a roughly $145 billion plan. About two-thirds of the money would go for tax breaks for individuals, plus extended unemployment and food stamp benefits, while the other third would be for business tax breaks. Individuals would get rebates of as much as $800, and married couples as much as $1,600.
All the presidential candidates have their own ideas for a stimulus plan. The most ambitiuous seems to be that of Mitt Romney who has proposed a tax cut/benefits enhancer program that would cost an astonishing $250 billion.

What none of these plans mention is how we are going to pay for these "stimulus packages" when the deficit is already at around $140 billion. And if we go into a recession anyway, that deficit is likely to rise precipitously as tax revenue falls off and people needing government assistance rises.

Yes, but it's an election year and politicians must be seen "doing something about the problem."

Even it if it makes things worse.

Posted at 09:09 AM | Email | | Share Share
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