New US Tax Rebate Package Unlikely

by Mike Godfrey, Tax-News.com, Washington

21 October 2008

With polls pointing ever more clearly towards a victory for Barack Obama in the US Presidential election, and President Bush sure to veto a second rebate bill if one is sent to him, it now seems likely that House Democrats will wait until the new session of Congress before putting forward a new rebate program.

House Speaker Nacy Pelosi told the Associated Press on Friday in an interview that a post-election 'lame-duck' session of Congress is now seeming unlikely and that further rebates or tax cuts would likely have to wait for the new Congress.

Only days ago Pelosi had been talking about a USD150bn package to include a rebate and tax cuts. Indeed the House passed a USD61bn rebate bill in September; but a matching bill failed in the Senate, and George Bush said he would veto it, anyway.

"The House will soon take up another economic package that will create jobs and address some of the most immediate consequences of the Administration’s serious mismanagement of our economy," Pelosi had announced in a statement dated September 15.

The US Treasury Department has now distributed 115,957 million payments totaling USD94bn under the first rebate package since disbursements started on April 28. The economic stimulus payments were worth up to USD600 (USD1,200 for married couples) to people who earn less than USD75,000 (USD150,000 for married couples). There was also an additional payment of USD300 for each eligible child younger than 17.

Pelosi had said in September that while the tax rebates in the first economic stimulus package seemed to have had a positive effect on the US economy, negative economic factors had since conspired to weaken their effect. "So while they may have saved the second quarter from a technical definition of a recession, the fact is that we are into a third quarter and we need to have another stimulus package," she argued.

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