15 February 2008
U.S. Government Leaders Agree on Economic Stimulus Package
Leaders from both political parties work together to energize U.S. economy
Washington -- A new federal law aimed at stimulating the U.S. economy was signed by President Bush February 13. The economic stimulus package, valued at $152 billion in 2008, will provide tax rebates to 128 million Americans and extend temporary tax incentives to encourage businesses to create jobs, according to the White House.
In signing the bill, Bush reaffirmed both his commitment to pro-growth governmental policies and his faith in the strength and resilience of the U.S. economy. “Over the past seven years, this system has absorbed shocks -- recession, corporate scandals, terrorist attacks, global war. Yet the genius of our system is that it can absorb such shocks and emerge even stronger,” he said.
World markets have watched the recent slowdown in the American economy closely, given how significantly the U.S. economy can affect economies of other nations.
Speaking January 23, Secretary of State Condoleezza Rice told the World Economic Forum in Davos, Switzerland, that the U.S. economy remains a leading engine for global economic growth, and world markets should have confidence in the underlying strength of the global economy.
"I know that many are concerned by the recent fluctuations in U.S. financial markets, and by concerns about the U.S. economy," she said. "The U.S. economy is resilient, its structure is sound, and its long-term economic fundamentals are healthy. The United States continues to welcome foreign investment and free trade." (See "Economic Growth Decline Predicted for 2008, with Rebound in 2009.")
The economic stimulus package passed by the U.S. Congress and signed by the president reflects a consensus forged after extensive negotiations between the White House and Capitol Hill, among Democrats and Republicans in Congress, and between the Senate and the House of Representatives (whose differing bills had to reconciled before the legislation could go to the president for his signature).
The Economic Stimulus Act of 2008 seeks to stimulate consumer spending by putting more money in the hands of Americans through “rebating” (returning) a portion of collected tax revenues to most Americans who file tax returns for the 2007 calendar year. Although the rebate will arrive at U.S. households in the form of a check issued by the federal Internal Revenue Service, the payment is not a government dole but instead reflects a decision by the government to let U.S. wage earners pay less tax to the government in 2008.
For businesses, the law encourages investment in new equipment in 2008 by increasing the federal tax deductions available for those purchases. “This will encourage businesses to create new jobs now because buying equipment, software, and tangible property this year will dramatically lower their taxes,” according to a White House fact sheet.
LEADERS OF BOTH PARTIES PRAISE SUCCESS OF BIPARTISANSHIP
“The bipartisan plan the president signed today will help millions of Americans who are struggling in an uncertain economy,” Nevada Senator Harry Reid, the leader of the Democratic majority party in the U.S. Senate, said. “Congress promised to act quickly and effectively to help those who need it most, and this law represents a promise kept to the American people.”
The legislation passed very quickly by Washington standards, moving from introduction (the formal submission of a draft law for congressional consideration) to the president’s pen in only 16 days. Some proposed legislation can take months or years to become law.
Democrat Nancy Pelosi, speaker of the U.S. House of Representatives, praised the bipartisan cooperation the bill represents: “At a time when American families face enormous economic challenges, Democrats, Republicans, and President Bush joined together to move our nation forward and renew our nation’s promise of jobs and opportunity for all. … By working quickly across party lines, and with the White House, this Congress is building a strong record of responsible governance.”
That view was shared by Secretary of the Treasury Henry Paulson, who said, "I congratulate the Senate leaders for their quick action to pass a bipartisan economic growth package that is temporary, broad-based, and will get money into our economy quickly.”
Paulson, in an Ask the White House webchat on January 25, echoed Secretary Rice’s message that “The U.S. economy is fundamentally strong and will continue to grow in the short term.”
Acknowledging that problems in the U.S. housing markets were “certainly taking a toll,” Paulson nonetheless affirmed, “I believe our economy will continue to grow this year, though at a slow pace. The U.S. economy is resilient and diverse. Exports are growing, and we are still creating jobs.”
A transcript of the president’s remarks at the bill signing and a related fact sheet are available on the White House Web site.
