US to buy time with new bill

Feb 12, 2008

Bush to sign stimulus Bill tomorrow

WASHINGTON - UNITED States President George W. Bush will sign a US$152 billion (S$216 billion) package tomorrow that is aimed at keeping the world's largest economy out of recession with tax rebates and business investment incentives.

Citing private-sector economists, Mr Bush said he did not believe the US economy was in a recession despite an implosion in the housing market, a widening credit crunch and, for the first time in 53 months, a loss of jobs last month.

'I will be signing this Bill on Wednesday,' Mr Bush said in an interview on Fox News last Sunday.
Asked whether he would consider further action if the economy continued to sputter, he said:
'We just have to play it by ear.'

US economic growth slowed abruptly to 0.6 per cent in the fourth quarter last year, following a surge of 4.9 per cent in the third quarter, the US government said.

The housing sector continued to soften.

Pending sales of previously- owned homes fell by 1.5 per cent in December and were off a sharp 24 per cent from a year ago, the National Association of Realtors said. Major retailers reported a slowdown in consumer spending.

Some Democrats have talked about offering a second measure aimed at providing more aid to the economy, but Mr Bush warned Congress against going too far to adopt regulations that could constrain businesses and the economy.

After a brief spat over the size of the stimulus package, the Senate and House of Representatives agreed last Thursday to a measure that would provide one-time rebates of up to US$600 for individuals, US$1,200 for couples and US$300 for each child.

Low-income Americans, including retirees on Social Security and disabled veterans who pay no income taxes, would receive cheques of US$300. The cheques could be in the mail within months.

The package should fuel corporate investments by allowing companies to write off equipment purchases made this year more quickly.

But some economists have said that while the measures will buy time, they may not be enough to avert recession.

REUTERS