Feds announce plan to lift consumer spending
President Bush and House of Representatives leaders have reached an agreement on an economic stimulus package, which will put more money into the hands of consumers.
“We're very pleased with what's happened so far and we really applaud the bi-partisan efforts by Democratic house speaker Nancy Pelosi and House Republican leader John Boehner, to endorse a stimulus package that would put money into consumers' pockets,” said Rachelle Bernstein, VP and tax counsel at the National Retail Federation. “We hope that this will be enacted by the House and the Senate soon.”
Under the agreement, individuals who pay taxes will receive checks of up to $600, working couples will receive up to $1,200, and couples with children will receive an additional $300 per child. Workers who make at least $3,000 but don't pay income taxes will receive $300.
While no dates have been set for when Congress will vote on this measure, it is expected to go to vote in mid February.
The NRF was vocal in getting the package pushed through, writing letters to President Bush and congressional leaders urging them to pass stimulus legislation.
The NRF's action followed the Commerce Department's January 15 announcement that retail sales for December, which rose only 1.7% unadjusted over 2006 and decreased 0.4%, seasonally adjusted from November. During the past holiday season of November and December 2007, sales increased only 3% over the same period in 2006, which was the lowest increase since 2002, when holiday sales rose only 1.3%.
The NRF's 2008 economic forecast, calling for a 3.5% increase in retail sales over 2007, the smallest since sales grew 3% in 2002, is based on the assumption that both the Federal Reserve and Congress would take action on economic stimulus.