Wednesday, January 30, 2008

US stimulus package

Sources: AFP, Bloomberg

The U.S. House of Representatives, in conjunction with the Bush Administration, has passed an “economic stimulus package” in an attempt to jumpstart the struggling US economy. The final vote tally in the House was 385-35, with wide bipartisan support. Nevertheless, the bill is expected to face some difficulty in making it through the U.S. Senate. House Speaker Nancy Pelosi (D-CA), along with President Bush, has encouraged the Senate to pass the measure. The Senate has a counter-proposal, which may slow down the bipartisan and compromise measure that has passed through the House.

The plan is a $146 billion package, intended to jumpstart the economy. This will be done by cutting taxes and sending rebate checks to over one hundred million US taxpayers. Individuals could receive up to $600 per person, with $1,200 for couples, and $300 per child for families. Furthermore, there are additional measures in the package to alleviate the mortgage crunch. Critics of the plan include Hillary Clinton and some Democratic lawmakers in the House. Senator Clinton would like to include additional measures for transportation projects, and Representative Jim Cooper balked at the measure because it continues to roll up debt. Moreover, other critics contend that the bill gives more tax rebates to higher income earners. Senator Harry Reid, Democratic leader in the Senate, has stated “We should not spend an extra $5 billion so I can get a rebate. Warren Buffet should not receive a rebate.”

Question: Will the tax rebate be enough to stimulate the sagging economy? How will such a bill survive in the Senate?

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