NRF: Stimulus bill not enough to spark spending

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NRF: Stimulus bill not enough to spark spending

February 13, 2009

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Washington--The National Retail Federation (NRF) is continuing its strong push for consumers on Capitol Hill, reiterating that boosting consumer confidence is key to curing the nation's economic woes.

According to a release issued earlier this week, the NRF told Congress that the economic-stimulus packaged currently being negotiated doesn't do enough to bring shoppers back into stores.

The NRF lauds the legislation's "Making Work Pay" tax credit, a home-ownership tax credit for home buyers, and other initiatives for low- and middle-income families, NRF Senior Vice President for Government Relations Steve Pfister stated in a letter to members of Congress.

But, Pfister stated in the letter, the NRF maintains that the best way to fuel economic growth is through sales-tax holidays, which would infuse an estimated $20 billion into the economy.

The NRF is proposing a series of 10-day national sales-tax holidays spanning two weekends in March, July and October. Tax-free treatment would apply to all tangible goods subject to state sales tax except tobacco and alcohol.

In addition, earlier this week, the NRF asked Congress to overturn recent Federal Reserve regulations that would effectively ban "same-as-cash" offers used by a wide range of retailers, including many jewelers.

In a letter to the Senate Banking, Housing and Urban Affairs Committee, NRF Senior Vice President and General Counsel Mallory Duncan said, "What is important is that every year millions of consumers have access to something that otherwise would be unavailable: interest-free loans. Tens of billions of dollars of purchases are made by the customers of NRF members. In a down economy, it is more than unfortunate that the Federal Reserve and banking regulators have seen fit to effectively ban these programs by making them financially unviable. We do not design the programs or the current disclosures. But we and American consumers will suffer the consequences if they are effectively banned."

The ban on "same-as-cash" offers is part of a wide range of new regulations the Federal Reserve issued in December that are set to take effect on July 1, 2010.

According to the NRF's release, the Federal Reserve issued the ban following an investigation into whether retailers and the credit card companies or banks that administer deferred interest programs sufficiently explain the terms to consumers.

"Rather than effectively regulate them," Duncan stated in the letter, "the Federal Reserve has effectively banned these programs, throwing out the good with the bad."

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