Bush signs rebate law, urges consumers to spend
About 130 million people are expected to receive checks intended to spark the economy.
WASHINGTON - The checks aren't in the mail, but they will be soon.
President Bush signed legislation yesterday to rush rebates ranging from $300 to $1,200 to millions of people, the centerpiece of government efforts to brace the wobbly economy. First, though, you must file your 2007 tax return.
More than 130 million people are expected to get the rebates, starting around May. Congress, Bush, the Federal Reserve, and Wall Street hope people will not be able to resist spending the money. Officials hope that the spending will energize a national economy that is in danger of toppling into a recession if it has not already.
The measure Bush signed - a $168 billion rescue package quickly passed by Congress last week - includes not only rebates for individuals but also tax breaks for businesses to spur investment in new plants and equipment. That, too, would help bolster U.S. economic activity. The package also contains provisions to help struggling homeowners clobbered by the housing collapse and the credit crunch refinance into more affordable mortgages.
Bush, who called the measure "a booster shot for our economy," praised the bipartisan cooperation on the bill.
Who gets a rebate? Most people who pay taxes or earn at least $3,000, including through Social Security or veterans' disability benefits. Singles making more than $75,000 and couples with income topping $150,000, however, will get smaller checks, up to the top limits for any rebate: incomes of $87,000 for individuals and $174,000 for couples.
To get a rebate, you must file a 2007 tax return and have a valid Social Security number. If you already filed your 2007 return, the IRS says you do not need to do anything extra.
Most taxpayers will receive a check of up to $600 for individuals and $1,200 for couples, with an additional $300 for each child.
People earning too little to pay taxes but at least $3,000 - including elderly people whose only income is from Social Security and veterans who live on disability payments - will get $300 if single, or $600 if a couple.
The IRS will send rebates - by mail or by direct deposit into your bank account - through the late spring and the summer. The rebates come in addition to any regular tax refund.
To pay for the rebates - which are estimated to cost about $117 billion over the next two years - the government will have to borrow more money, enlarging the budget deficit.
"I do think this will give the economy a shot of adrenaline," said Stuart Hoffman, chief economist at PNC Financial Services Group.