Bush signs plan to boost US economy

Other News Materials 14 February 2008 00:38 (UTC +04:00)

( dpa ) - President George W Bush on Wednesday signed a 152-billion-dollar plan of tax incentives for businesses and average Americans to fortify the flagging US economy against a recession.

Passed by Congress with unusual speed after Bush proposed an economic stimulus package last month, the temporary measures are mainly designed to put more spending money in US consumers' pockets.

"You know, I know a lot of Americans are concerned about our economic future," Bush said at a White House signing ceremony. "The bill is large enough to have an impact."

Individuals will get the bulk of the one-time income tax relief - rebate checks this year of up to 600 dollars for singles, 1,200 dollars for married couples, plus more for children. Consumers account for about two-thirds of the US economy.

Bush praised Congress, led by the opposition Democrats, for agreeing on "a really good piece of legislation" quickly.

He and congressional leaders said the plan showed that the two main US parties can overcome ideological divisions and work together for the good of the country.

"This package gets money into the hands of Americans struggling to make ends meet, helps families with children, cuts taxes for small businesses that will create new jobs, and stimulates our slowing economy," said Democrat Nancy Pelosi, the speaker of the House of Representatives.

Agreement came last week after Bush's centre-right Republicans blocked Democratic efforts to extend jobless benefits and help people pay heating bills, saying those measures were too costly.

But the final version retained tax rebates specifically for 250,000 disabled veterans and 21 million senior citizens living on government pensions.

The Bush administration and Congress worked closely to create the package, aimed at giving a shot in the arm to an economy hit by a housing market slump, high energy prices and rising unemployment.

In a separate effort to ward off a recession, the US Federal Reserve last month slashed its key interest rate in two steps by a combined 1.25 percentage points to 3 per cent.

Economists have said that any temporary tax relief would have to reach consumers quickly to offset a recession, and Bush had urged the Senate to avoid loading up the stimulus package with unnecessary spending.