Tax rebates arriving sooner than planned

WASHINGTON — Federal tax rebates will start being sent out Monday, earlier than previously announced.

President Bush said Friday the rebates should help Americans cope with rising gasoline and food prices, as well as aid a slumping economy.

Democrats said they were glad the rebate checks were about to go out but suggested multinational oil companies were not among the businesses the stimulus package was originally designed to help.

The first rebates will be directly deposited into taxpayers’ bank accounts. The Internal Revenue Service had been saying direct deposits wouldn’t start until next Friday. Bush said paper checks would begin going out May 9, also a week earlier than previously announced.

“The money is going to help Americans offset the high prices we’re seeing at the gas pump, the grocery store, and also give our economy a boost to help us pull out of this economic slowdown,” Bush said.

Bush’s emphasis on fuel and food prices differed from other comments he’s made since signing the economic stimulus legislation, intended to aid the economy by boosting overall consumer spending, which accounts for roughly two-thirds of the nation’s economic activity.

Bush has suggested the rebates could trigger a spending spree.

But by saying expressly that people could use these one-time checks to pay for such necessities as food and gas, Bush underscored the deepening challenges facing the economy.

Democrats were quick to pick up on the change of focus.

“It’s galling to think that taxpayers’ stimulus checks will be lining the pockets of OPEC. The sad truth is that the average American family will spend almost their entire stimulus check on higher gas prices this year,” said Sen. Charles Schumer, D-N.Y., chairman of the Joint Economic Committee of Congress.

OPEC is the Organization of Petroleum Exporting Countries.

“Unless the administration gets OPEC to increase oil supply, American consumers are going to be in for a scorching summer of $4 gasoline with no relief in sight,” Schumer said.

House Speaker Nancy Pelosi, D-San Francisco, agreed that people “need this rebate to cope with the rising cost of gas and groceries.”

She said that, while the rebates would help to get the economy moving, there was a need for a second stimulus package “and we have begun some conversation with the administration and Republicans.”

The rebates — up to $600 for an individual, $1,200 for a couple and an additional $300 for each dependent child — are the centerpiece of the government’s $168 billion stimulus package, enacted in February. Roughly 130 million households are expected to get them.

People must file a tax return for their 2007 income to be eligible for a rebate check.

The IRS now says all checks for those who filed tax returns on time are scheduled to be deposited or mailed by July 11.