The U.S. Treasury will start sending tax rebate checks to Americans next week, ahead of its previous schedule, and aims to pump $50 billion into the U.S. economy by the end of May, Treasury Secretary Henry Paulson said Thursday.
“We will start a bit earlier. We’re a little bit ahead of schedule, so we will start right on Monday with direct deposits,” Paulson told Reuters in an interview.
Previously, the Treasury had planned to begin tax rebate payments in early May as part of a $152 billion stimulus plan passed in February.
The checks had to wait until after the Internal Revenue Service processed the bulk of tax returns filed before April 15.
But Paulson noted the economy is facing stiff headwinds from high fuel prices and a protracted housing downturn, so the administration wants to rush funds to consumers to keep the economy from deteriorating further.
He said the distribution of rebate payments totaling more than $100 billion will be largely completed by the end of June, well before his previous goal of summer’s end.
More than 800,000 electronic payments will be sent to tax filers per day on Monday, Tuesday and Wednesday of next week, with an additional 5 million sent on Friday, May 2.
“Close to 8 million people will get their stimulus payments next week,” he said.
“You add that to the incentives for business to make investments, we think that will give the economy a boost, upwards of 500,000 jobs,” Paulson added.
He said the economy had slowed down significantly, noting that “last quarter was a tough quarter,” with continued downside risks from housing and from financial market turmoil.