Bush Proposes New Tax Cuts — ‘But Will It Repel Recession?’

WASHINGTON, D.C. When the State of the Union Address is given by President Bush in the next few days, one of the hot topics will likely be a proposal to stimulate the economy and waylay a recession for the rich.

The President is urging a “quick” fix to provide spending incentives for the middle classes as more and more economic professionals predict that America is on the threshold of a recession.

Details of the President’s proposal are yet to be divulged.

Last week, Federal Reserve Board chairman Ben Bernanke gave Congress a negative report on the state of the economy, suggesting a reduction in interest rates but also a fiscal stimulus to go along with it, to head off what is being considered more than a moderate downturn.

One key to Bush’s proposal is quick action that might involve cutting taxes by $1,600 for every taxpaying family and $800 for single taxpayers, while adding families and individuals to the list whose incomes are below tax-paying levels. The President is also looking at measures to stimulate business investment and lower unemployment.

The package being studied would likly cost approximately $150 billion and be temporary, with the infusion predicted to begin showing results late this year, prior to its expiration.

Some economists suggest that the “fix” will be “too little, too late” and that the ever-rising cost of fuel will nullify any gains for households, leaving citizens at the end of the tax cut with higher energy bills to contend with, unaided in the long run. Others say that the increase in income will not make up for losses already suffered and does not guarantee spending increases in such a way as to repel a recession.