WASHINGTON - It took only weeks for the notoriously slowCongress to pass the $787 billion economic stimulus package.President Barack Obama signed it into law less than one month intohis presidency.
So when should most people hope to start seeing the benefits oftax cuts in it?
By April 1, according to the president.
"Never before in our history has a tax cut taken effect fasteror gone to so many hardworking Americans," Obama said Saturday inhis weekly radio and Internet address.
The president said his signature two-year "Making Work Pay"tax break will affect 95 percent of working families, and, in sixweeks' time, a typical family will start taking home at least $65more every month.
Taxpayers won't get a separate check mailed to them like manydid with last year's one-time payment designed by the Bushadministration to help boost the economy.
Instead, Obama's credit -- up to $400 credit for individuals andup to $800 credit for married couples -- is to be doled out throughthe rest of the year through paychecks. Most workers are to seeabout a $13 per week increase in their take-home pay. In 2010, thecredit would be about $7.70 a week, if it is spread over the entireyear.
People who do not earn enough money to owe income taxes areeligible for the credit, an attempt to offset the payroll taxesthey pay.
But the credit is phased out for higher-income taxpayers,defined as individuals who have a modified adjusted gross income ofbetween $75,000 and $95,000, and married couples filing jointly whomake between $150,000 and $190,000. Thus, the administration saysmany of them will see little or no change in their paychecks.
With employers and payroll companies responsible for making thenecessary changes, no worker has to fill out a new W-4 withholdingform or do anything else to get the credit. The Internal RevenueService, however, is suggesting that individuals and couples withmultiple jobs submit a revised withholding form to be on the safeside. And, it's always a good idea for people to keep a close eyeon pay stubs to make sure their money is included.
In concert with Obama's announcement, the Treasury Department onSaturday began directing employers to reduce the amount of taxeswithheld from people's paychecks in accordance with the new law assoon as possible and not later than April 1. The IRS also releasednew withholding tables on its Web site to help guide employers inreflecting the new credit. It says more instructions about taxprovisions in the law will be available next week, and will bemailed to more than 9 million employers next month.
"We have the wheels turning to deliver much needed boosts tothe paychecks of working Americans," Treasury Secretary TimGeithner said in a statement.
Obama's expensive and ambitious package of federal spending andtax cuts is designed to revive the economy and save or create 3.5million or more jobs. It aimed to inject a sudden boost of cashinto transportation, education, energy and health care, whilehelping recession victims through tax cuts, extended unemploymentbenefits and short-term health insurance assistance. It also willadd to a rapidly growing national debt.
The president signed the measure into law Tuesday.
In his weekly address, Obama said he was grateful to Congress,governors, mayors and all the people who supported the measure.
Still, he added: "It is only a first step on the road toeconomic recovery. And we cannot fail to complete the journey." Hesaid the country also must stem foreclosures, repair the bankingsystem, get credit flowing again and revamp financial industryregulations.
And, even as he promoted the record-breaking spending plan, hecalled for doing what's necessary to control "exploding" deficitsas the economy begins to improve.
Obama is holding a bipartisan "fiscal responsibility summit"at the White House on Monday to talk about ways to control thetrillion-dollar budget deficit. The next day, he is to address ajoint session of Congress, a speech expected to focus heavily onthe economy. On Thursday, Obama will send a budget request toCongress "that's sober in its assessments, honest in itsaccounting, and lays out in detail my strategy for investing inwhat we need, cutting what we don't and restoring fiscaldiscipline."
Republicans are certain to hold him to that.
In the GOP's weekly address, Rep. Dave Camp of Michigan, the topRepublican on the House Ways and Means Committee, said his partywants to work with Obama to solve the country's economic problems"in a responsible way that does not burden our children andgrandchildren with a mountain of debt."
"We can't borrow and spend our way back to prosperity," Campsaid. "If he is serious about dealing with the tough issues andgetting spending under control, his budget will show it."