By DPA
Washington : The US House of Representatives overwhelmingly approved an emergency economic stimulus package that includes more than $146 billion in tax relief designed to encourage spending and investment.
The legislation passed 385-35 and is designed to temporarily boost the economy as it undergoes an expected slowdown this year caused by the crisis in the housing market and high energy prices.
The economic woes have sparked worries of a recession, prompting President George W. Bush and Congress to develop legislation to put money back into the hands of consumers and investors.
“This is a very good start,” Bush said after the vote Tuesday.
Under the plan, most US taxpayers would receive at least a $600 tax rebate check later this year. Families could receive as much as $1,200 and an additional $300 for each child.
Bush, during his State of the Union address Monday night, urged Congress to quickly pass the measure, but he is facing resistance in the Senate, where broader proposals are under consideration.
The Senate proposal would give billions of dollars to the unemployed and senior citizens and reduce the tax relief.
The Federal Reserve has warned of slower economic growth for 2008 and has begun to slash interest rates. The Fed cut the interest rate by three-quarters of a percentage point to 3.5 percent at an emergency meeting Jan 22.
Economists are predicting it will lower the rate again by as much a half-point at a meeting of the board Wednesday.
The International Monetary Fund (IMF), which released its global outlook report Tuesday, said the US economy “slowed notably” in the 2007 fourth quarter with “indicators showing weakening of manufacturing and housing sector activity, employment, and consumption”.
Bush has remained confident that the long-term prospects for the economy remain solid, but acknowledged in the State of the Union that the economy faces a “period of uncertainty”.
“In the long run, Americans can be confident about our economic growth,” he said before the joint session of Congress. “But in the short run, we can all see that growth is slowing.”
The economic woes have become the top issue of the presidential campaign to succeed Bush that has previously been dominated by the conflict in Iraq.
Economists have said that any temporary tax relief would have to reach consumers quickly to offset a recession, and Bush urged the Senate to avoid the temptation to “load up” the stimulus package he agreed to with Congressional leaders with additional measures.
“That would delay or derail it, and neither option is acceptable,” he said. “This Congress must pass it as soon as possible.”