Rebate Checks Could Take Months to Mail

Jan. 23, 2008— -- President Bush and Congress are working quickly to get some type of economic stimulus package out to the American people to help the sagging U.S. economy.

Most parties expect some type of tax refund check to be part of the package, but it could take months to actually get millions of checks mailed out to the public.

Peter Orszag, director of the Congressional Budget Office, said today that the earliest such checks could be mailed out in mid May or June.

There will be a lag in getting them processed and in the mail, because the Internal Revenue Service is now busy working on 2007 income tax filings, Orszag told the House Budget Committee today.

"The same [information technology] system and the same people who process rebates are working on that, so basically until the 2007 tax season is closed, the IRS cannot turn in any significant way to processing rebates," Orszag said.

Once the checks start going out, Orszag said, it could still take another eight to 10 weeks to mail them out.

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University of Maryland economist Carmen Reinhart told ABC News that moves by the Federal Reserve are more "nimble" than rebate checks which can take a long time to get into consumer's hands.

"One thing is announcing it, it's another to implement, and another is the time it takes to take effect and hit household spending," Reinhart said. "Those are very long lags. It's the right direction … but lags are significant and the snags are many."

"Fact remains, you don't heal balance sheets overnight," Reinhart added. "You just don't."

The president called Friday for a short-term $140 billion to $150 billion economic stimulus package to give the U.S. economy a "shot in the arm."

He urged Congress to act quickly to "keep the economy growing and to save jobs."