The Center on Budget and Policy Priorities has looked at BushCo's Stimu-Plan (TM). Predictably, it's not even worth considering.
The plan is being described as featuring a rebate of $800 to individuals and $1,600 to couples. That, however, is misleading. Only the 60 percent of tax filers with incomes high enough to be in the 15 percent tax bracket or a higher bracket could get those amounts.
- Households that earn too little to be in the 10 percent bracket would get nothing. The fact that many of these workers pay large amounts of payroll tax would be ignored. Families of four making less than $24,900 would be shut out entirely.
- All households in the 10 percent bracket — families of four with incomes between $24,900 and $40,950, and many families somewhat above that range as well — would get only a partial rebate. [1]
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While including relatively ineffective business tax subsidies, the plan omits any additional weeks of unemployment insurance benefits for laid-off workers whose UI benefits run out before they can find a new job, despite the fact that CBO and other analysts rate this very high as effective stimulus and it has been a basic component of stimulus packages adopted in every recession for decades.
The plan thus seems to favor Administration ideological or political preferences over the evidence on what would work best in helping to keep the economy out of a painful recession.
Anonymous aides are saying that the Congressional plan will come back with the increases to food stamps and unemployment insurance that actually work.
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