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CNN Live At Daybreak
Millions May Get Some Extra Cash This Month
Aired July 01, 2003 - 05:15 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
COSTELLO: Millions of you may be getting some extra cash later this month. Thanks to a new tax plan, many families will start getting $400 checks in the mail for each child they have. But will people spend enough of that money to help boost the economy?
CNN's Kathleen Hays takes a look.
(BEGIN VIDEOTAPE)
KATHLEEN HAYS, CNN CORRESPONDENT (voice-over): For Alan Batt and his wife, having twins is now even more than a double blessing. Each child is worth an extra $400 in tax savings. Add in all the other tax cuts Washington passed and the Batt family is saving $2,000 this year. Alan already knows what he's going to do with the money.
ALAN BATT, FATHER: I promised my wife a new refrigerator. We have a wonderful, beautiful white refrigerator, but now that we have two kids, you know, there just isn't enough room in it.
HAYS: Spending it is not what Kathy Boyle, his long time investment adviser, thinks he should do. Like many other financial experts, she says Alan should save it.
KATHY BOYLE, FINANCIAL ADVISER: Most people are well behind the eight ball. They haven't saved enough. They're not saving enough. So, well, yes, the economy hopes that we'll go out and continue to spend, we hope that people will put it to work saving.
HAYS: But supporters say even if consumers save some of their tax cuts, they'll spend enough to help double the economy's growth rate in the second half of the year.
JOHN RYDING, BEAR STEARNS: I think the economy is poised to accelerate to around four percent economic growth. I think, if you look at the size of the tax cuts, it's not unreasonable to think that the tax cuts can account for perhaps up to one percent of that growth.
HAYS: But President Bush's worst nightmare would be if the expected increase in spending doesn't translate into lasting growth.
JOHN LONSKI, WOODY'S INVESTOR SERVICES: There's still a lot of questions regarding how long this increase in consumer spending might persist. Will it just be around for a couple of months and then disappear later in the year?
HAYS: For Alan, it's not about the economy, it's about keeping his family happy. BATT: The best investment I could make is in my wife's peace of mind.
HAYS (on camera): When it comes to
Wall Street's peace of mind, they're counting on a lot more than the president's tax cuts. They're also betting on record low interest rates, including the Federal Reserve's move last week to get the economy on track.
Kathleen Hays, CNN Financial News, New York.
(END VIDEOTAPE)
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired July 1, 2003 - 05:15 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
COSTELLO: Millions of you may be getting some extra cash later this month. Thanks to a new tax plan, many families will start getting $400 checks in the mail for each child they have. But will people spend enough of that money to help boost the economy?
CNN's Kathleen Hays takes a look.
(BEGIN VIDEOTAPE)
KATHLEEN HAYS, CNN CORRESPONDENT (voice-over): For Alan Batt and his wife, having twins is now even more than a double blessing. Each child is worth an extra $400 in tax savings. Add in all the other tax cuts Washington passed and the Batt family is saving $2,000 this year. Alan already knows what he's going to do with the money.
ALAN BATT, FATHER: I promised my wife a new refrigerator. We have a wonderful, beautiful white refrigerator, but now that we have two kids, you know, there just isn't enough room in it.
HAYS: Spending it is not what Kathy Boyle, his long time investment adviser, thinks he should do. Like many other financial experts, she says Alan should save it.
KATHY BOYLE, FINANCIAL ADVISER: Most people are well behind the eight ball. They haven't saved enough. They're not saving enough. So, well, yes, the economy hopes that we'll go out and continue to spend, we hope that people will put it to work saving.
HAYS: But supporters say even if consumers save some of their tax cuts, they'll spend enough to help double the economy's growth rate in the second half of the year.
JOHN RYDING, BEAR STEARNS: I think the economy is poised to accelerate to around four percent economic growth. I think, if you look at the size of the tax cuts, it's not unreasonable to think that the tax cuts can account for perhaps up to one percent of that growth.
HAYS: But President Bush's worst nightmare would be if the expected increase in spending doesn't translate into lasting growth.
JOHN LONSKI, WOODY'S INVESTOR SERVICES: There's still a lot of questions regarding how long this increase in consumer spending might persist. Will it just be around for a couple of months and then disappear later in the year?
HAYS: For Alan, it's not about the economy, it's about keeping his family happy. BATT: The best investment I could make is in my wife's peace of mind.
HAYS (on camera): When it comes to
Wall Street's peace of mind, they're counting on a lot more than the president's tax cuts. They're also betting on record low interest rates, including the Federal Reserve's move last week to get the economy on track.
Kathleen Hays, CNN Financial News, New York.
(END VIDEOTAPE)
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
