US Treasury Secretary Says That Tax Rebates Are Taking Effect

by Mike Godfrey, Tax-News.com, Washington

07 September 2001

In the face of fierce speculation regarding the hows, whys, and wherefores of President Bush's landmark tax rebate scheme, Treasury Secretary Paul O'Neill has spoken out, predicting that the economic slowdown in the United States is coming to an end.

'It seems to me that it is always a good idea to tell the truth and the truth is that we seem to be stabilized,' he told reporters at a press conference earlier this week. 'We seem to be improving.' This flies in the face of predictions made by analysts, who have suggested that US taxpayers may confound the government's attempts to reboot the economy, by saving their rebate checks, or using them to pay personal debts.

'I just don't understand this notion that somehow one is going to see an immediate effect when in fact only half the checks have been mailed,' he puzzled. According to the Treasury Department, the mailout is scheduled for completion late September.

As a result of the rebate checks and the Fed's aggressive credit easing, O'Neill predicted that the US would see a rekindling of economic growth throughout 2002 'in the range of 2.5% to 3%, and maybe even a little better than that.'

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