Rebates: Shot-in-Arm or Pre-Election Bribe?

Is it a way to stave off a recession or is it simply politicians buying you off with your own money?

Whether you think it is brilliant economic strategy or a bread-and-circuses approach, the tax rebate plan would put a chunk of change into the pockets of most federal workers and federal retirees too.

Under the original plan — favored by the White House and the top Democratic congressional leadership — individuals would get a check of around $600 and married couples would get up to $1,200. (Some media outlets are reporting the rebates as having a range of $800 to $1600.) The checks, if Congress gives it quick approval, could be sent out beginning as early as May.

Neither the House nor Senate has approved a plan and many Senators (and individiual House members) have problems with the first proposal. Questions that will shape the final economic stimulus package include basics like: should everybody get a rebate, even if they paid no taxes? What about people who get most of their income from Social Security?

The National Active and Retired Federal Employees has advised its members that, “most federal annuitants would receive a tax rebate,” under the package agreed to by House leaders and the White House.

NARFE noted the confused interpretations of the stimulus plan and said that, “retirees with no earned income, but with taxable income — which could include distributions from Social Security, pensions, annuities, traditional IRAs and other retirement income — would still qualify for rebate checks.”

Under the plan, NARFE says, the rebates would begin to phase out at $75,000 and $150,000 adjusted gross income (generally the amount on which you pay taxes) for a single person with an AGI of $75,000 and above — and for couples with an AGI of $150,000 and above. The impact, NARFE says, would mean no rebate check for those with AGI’s of $87,000 (single) and $186,000 (couples).

It may take awhile to get congressional agreement on the plan.

Many Senators, and House members who were out in the cold during the negotiations, want to put their stamp on the plan. Or kill it.

NARFE, and other groups representing seniors, plan to go to the Senate Finance Committee to insure that retirees who pay no federal income taxes are still eligible for rebates.

Eye On SSA’s Future Plans

The threat of furloughs for Social Security employees seems to have faded. Suprise, suprise! But the National Treasury Employees Union wants Congress to set up a permanent system requiring SSA’s management to make an annual report on budget, workload and staffing plans. Rep. Brian Higgins (D-NY) introduced the bill.

Nearly Useless Factoid

Ralph Lease of New Mexico thinks the U.S. Postal Service is pretty good because, “When I was stationed along the Canadian border in North Dakota in the mid-80’s, my late uncle wrote me a letter, addressing it to me by putting only my name and ‘North Dakota Territory’. No zip code, no town! The letter got to me from his home in Iowa in less than a week! I just wish I would have kept that letter, ’cause no one believes that such a letter would get to its destination faster than a properly addressed letter!”

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