Acting just three weeks after President Bush first proposed a $150 billion economic stimulus plan, the Senate added rebates for 20 million seniors and 250,000 disabled veterans to a package passed by the House last week. The new measure, adopted by the House Thursday night, is estimated to cost $168 billion over two years.
The measure goes to Bush for his signature, which White House deputy press secretary Tony Fratto said will come next week. Treasury Secretary Henry Paulson said the Internal Revenue Service will get to work immediately, but it will take two to four months for the rebate checks to arrive.
Most single taxpayers will get $600 and couples $1,200, plus $300 for each child under 17. Anyone with at least $3,000 in earned income last year will get $300, as will seniors on Social Security, even if they paid no income taxes. The rebates phase out beginning at $75,000 in adjusted gross income for individuals, $150,000 for couples.
The big question now is how the Federal Reserve will react. Adjusting monetary policy in the wake of fiscal policy interventions is always a tricky thing. Regardless, I still maintain that when folks actually receive rebate checks will influence how much is actually spent on lawn and garden products and services. More on this in a future post.