First war bonds since WWII close to OK from Congress

WASHINGTON -- Congress is rushing to approve the first U.S. war bonds since World War II in the aftermath of the terror attacks, yet many economists say Americans could give a bigger boost by simply spending money.

Even the Treasury Department is giving the bonds idea a lukewarm response, although officials are careful to praise the "patriotic intent and sentiment" of the legislation's sponsors on Capitol Hill.

"A strong economy is perhaps our greatest asset as we move forward with this effort," said Treasury Department spokeswoman Tara Bradshaw. "We hope that consumers anxious to put their money to work for the nation will make the purchases planned before Sept. 11 as consumer spending is vital to the economy."

The Senate approved its version of the war bonds legislation last month as an amendment to the annual Treasury Department spending bill. The House is to take up an identical bill Tuesday, improving the likelihood that a final version will reach President Bush's desk this fall.

Proceeds from Treasury savings bonds, including war bonds, go into a general pot of money that can be used for any government expenditure. But supporters say bonds sold in the name of the anti-terrorism effort would be an important morale booster, giving ordinary Americans a way to help.

Tom Ochsenschlager, tax partner at Grant Thornton LLP, said the legislation was mostly symbolic "form over substance" because the government will do whatever it takes to finance the anti-terrorism effort. But he said the bonds themselves could become popular, especially with people looking for a relatively safe investment.

"It's better than a mattress," Ochsenschlager said.