Jay
Something for the thread to have some fun with.
Treasury May Have to Borrow to Pay for $38 Bln Tax
Cut Payment
By Liz Goldenberg and Vivianne Rodrigues
New York, June 20 (Bloomberg) -- On July 23, the U.S. government will start
mailing $38 billion in rebates to taxpayers. The Treasury may have to raise the
money before it writes the checks.
The slowdown in the economy has resulted in a shortfall of corporate tax
revenue. To finance the first installment of President George W. Bush's tax
rebate, the Treasury may have to sell more debt.
``It's a double whammy,'' said Anthony Chan, chief economist at Banc One
Investment Advisors Corp. in Columbus, Ohio. ``The government is being
squeezed by both sides of this equation.''
The government may sell an additional $67 billion worth of Treasury bills by Sept.
30, according to Merrill Lynch economist Kathy Bostjancic. The Treasury may
announce today it will also scale back planned reductions in the amount of
two-year notes it will sell this month.
The tax rebates, part of a $1.35 trillion tax reduction over the next nine years,
were to be financed by the nation's budget surplus. The tax package was signed
into law June 7.
``The government said it would use the extra funds to pay for the tax cut, but now
with the weak economy, it no longer has too much of that extra money left,''
Bank One's Chan said. ``This brings financing problems in the short term.''
Corporate tax receipts that were due on June 15 have fallen 25 percent from last
year's levels, according to analysts at Wrightson Associates, a research firm.
Treasury Department spokesman Tony Fratto wasn't available to comment.
quote.bloomberg.com.
Jim |
