Can Bush Plan Energize the Economy?

Jan. 19, 2008 — -- The White House hopes the $145 billion stimulus package announced Friday will be the right medicine for the ailing U.S. economy.

Today, in his weekly radio address, President Bush said he wants to devote a portion to incentives for businesses to invest.

"This growth package must be built on broad-based tax relief that will directly affect economic growth," said Bush, "not the kind of spending projects that would have little immediate impact on our economy."

Democrats, however, want to add spending for food stamps, unemployment benefits and infrastructure projects.

"Economists agree that middle- and working-class people are likely to spend that money in a way that will effectively stimulate the economy and create jobs," Massachusetts Rep. Barney Frank said in the Democratic Response.

There is bipartisan support, however, for tax rebates of up to $800 for individuals and $1,600 for married couples. According to Michael Santoli of Barron's, "There is going to be some kind of tax rebate that is going to get cash in the hands of families relatively quickly — not huge amounts, but enough to make a difference for people who are strapped."

But given record high levels of consumer debt, along with mounting utility bills, the question is whether Americans can really afford to spend any rebate money they receive.

Carmelo Gramuglia of Milford, N.J., told ABC News that if he got rebate money, "we'd spend a third of it, save a third of it and help relieve our debt with another third of it."

Washington hopes the plan will work as well as the $98 billion stimulus package enacted from 2001 to 2003 that many believe got the economy rolling again.