New stimulus plan: tax cuts, not rebates

November 6, 2008

A second stimulus package is in the planning stages, but don't get your hopes up for a second rebate check.

House Speaker Nancy Pelosi told the Wall Street Journal today that her party, fresh from capturing the White House and adding to its numbers on Capitol Hill, is considering a two-staged effort to boost the shaky U.S.
economy.

The outlook right now is for a $60 billion to $100 billion
stimulus package, followed early next year by a companion measure that
would include a "permanent tax cut."

Pelosi said any
measure enacted in a lame-duck Congressional session this month would
effectively be a down payment on additional measures enacted later.
"We'll take the longer view as soon as we take over in January," she said.

A tax cut is preferable to a direct rebate like the one issued earlier this year, Pelosi said, because permanent rate action would likely have a more immediate impact on the economy, especially if payroll tax withholding tables are adjusted to speed dollars into worker paychecks.

Read the full WSJ Pelosi interview here, and more on Pelosi's economic stimulus plans from Reuters.

The U.S. Chamber of Commerce also has some thoughts on what business thinks is needed to boost the economy; details on that group's wish list can be found the New York Time's politics blog, The Caucus.

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