Rebate checks floated as way to boost economy

According to an article on CNNPolitics.com on income taxes and the economy:

Treasury Secretary Henry Paulson ended his third meeting of the day with House leaders Wednesday night with no indication of a deal on a $150 billion economic stimulus package.

But a GOP leader told reporters more public comments could be expected Thursday morning.

House Minority Leader John Boehner, R-Ohio -- who spent an hour and a half with Paulson and House Speaker Nancy Pelosi, D-California, on Capitol Hill on Wednesday night -- would not say if leaders were close to a deal.

"We're hopeful," he said. "We'll have more to say tomorrow morning."

Pelosi would not answer questions about any announcement of a deal. "We're moving toward that," she said. "We're not at that place yet."

The late-night negotiations are a sign of the urgency of the talks as the United States slogs through an economic slowdown.

While the final details are still being negotiated, officials in both parties said the current outlines of the package would give individuals a tax rebate check in the neighborhood of $800, while families could receive up to $1,600.

The main sticking point in the negotiations is who the rebate checks should target. Bush has said he wants rebates for those who pay income taxes.

But Democrats say such an approach would mean tens of millions of households would get only a partial rebate or none at all -- about 65 million, the liberal Center for Budget and Policy Priorities estimates.

That group includes those whose tax bill is so low that their rebate would be much less than $800 or $1,600, as well as low-income households with no income tax liability because of credits and other tax breaks. It would also include households that do not have to file a tax return.

The current strategy is for Pelosi and Boehner to iron out the details with Paulson as soon as next week and then get the package passed in the House by the first week of February, according to officials in Congress and in the Bush administration. That will then pressure the Senate to pass the same version by mid-February before lawmakers leave town for the Presidents Day recess.

Even if that goal is reached, however, Bush administration officials acknowledge it may take several more weeks before the Treasury Department can actually cut the rebate checks and get them in the mail for consumers -- a task that will be more difficult because the Internal Revenue Service is very busy now dealing with 2007 tax returns.

One senior official noted the president signed a similar 2001 round of tax rebates around Memorial Day, after the IRS's busy season.

"We're working with the IRS right now to figure this out," the official noted.