CBO touts benefits of Dem stimulus plan

[maddezmom]

Source: AP

WASHINGTON - Economic stimulus proposals favored by Democrats, including tax rebates, extended unemployment benefits and a temporary increase in food stamps are cost-effective ways for Congress to try to boost the economy, the Congressional Budget Office said Tuesday.

At the same time, CBO said, some options floated by Republicans such as extending President Bush's tax cuts, cutting corporate tax rates and giving businesses new incentives to invest may be less cost-effective in the short term.

The nonpartisan CBO echoed the views of many economists who say the most effective way to stimulate the economy is to provide money — either through tax cuts or direct payments such as food stamps — to people most likely to spend it quickly.

CBO provides economic and budgetary analysis to Congress. Tuesday's study was requested by Senate Budget Committee Chairman Kent Conrad, D-N.D., and House Budget Committee Chairman John Spratt, D-S.C.

The study should provide fuel for the stimulus debate already consuming lawmakers.

It said lump-sum tax rebates like the $300-600 rebates delivered to taxpayers seven years ago are among the more cost-effective ways for Congress to jump-start the economy, though CBO cautioned that rebates are more effective when given to middle- and lower-income taxpayers more likely to spend it.



Read more: http://news.yahoo.com/s/ap/20080116/ap_on_go_co/economy_stimulus