Will yesterday’s Federal Reserve decision to lower the federal funds and the discount rates by a record three-quarters of a percentage point cause Rep. Charles Rangel, the Democratic chairman of the Ways and Means Committee, to shelve his plans for a fiscal stimulus package?

Quite the reverse, unfortunately. Politicians want to show that they care, too. As Bear Stearns chief economist David Malpass puts it, “nothing is more fun for Washington than handing out checks.”

That’s perhaps why President Bush proposes to end his presidency as it began — by distributing checks to taxpayers to stimulate a slowing economy. Rather than focusing on fixing mortgage markets and making the Bush tax cuts permanent, both of which might actually calm jittery markets, Mr. Rangel will help him by waiving the budget rules that require additional spending to be offset by budget trims or higher taxes, the so-called pay-as-you-go rule.

“Pay-go is inconsistent with trying to resolve a recession,” Mr. Rangel was reported to have said.

But there’s a crucial difference between mailing out checks as an advance on a permanent tax-rate cut and mailing out checks like a helicopter scattering dollars. In 2001, the Bush tax refund checks, $300 to individuals, $600 to households, were based on a tax rate reduction in the lowest income bracket.

Congress had just passed a comprehensive bill that lowered taxes in all brackets by 2006, with the top rate declining to 35% from 39.6%. The lowest two rates were reduced to 10% from 15% and to 25% from 28% retroactive January 1, 2001. The check was an effort to get tax refunds out sooner.

Yet the rebates Mr. Bush suggests as part of an “economic growth package” are not linked to any rate cuts. On the contrary, tax rates are set to rise in 2010. So far Congress has taken no action to rescind the increases. Sending people checks even though taxes are set to go up in 2010 would not change fundamental incentives to work and invest, or even persuade them that they are well-off enough to spend the checks.

Milton Friedman won a Nobel Prize for his concept of “permanent” or “lifetime” income, which postulated that people make decisions based on income they expect to receive over the course of their lives. If tax rates were scheduled to go down, consumers would be encouraged to spend their rebates, because they know they’ll have more later. But with rates scheduled to rise in 2010, Mr. Friedman’s hypothesis suggests that most would save the rebate.

Stanford economist Edward Lazear, chairman of the President’s Council of Economic Advisers, defended President Bush’s plans to distribute checks in a conference call with economists on January 18. “Any tax cuts are good,” he said.

“After all,” Mr. Lazear continued, “we distributed checks in 2001 and the economy recovered.”

The economy didn’t quite “recover,” but the economic downturn was milder than expected following the September 11 terrorist attacks. Economic growth did not even have two consecutive quarters of decline, and so did not meet technical definitions of recession.

The economy soared in the summer of 2003, after a May 2003 tax bill accelerated the upper-income individual tax cuts of 2001. The 2003 bill also reduced taxation of dividends and put in place more generous business deductions.

Expanding business expensing and depreciation schedules stimulates the economy more than permanent cuts would. That’s because if businesses know that they can expense equipment, that is, deduct 100% of cost in the year purchased, say 2008, they may accelerate into 2008 purchases contemplated for 2009 and even 2010.

Hence, it would make economic sense to enact large business investment incentives without mailing tax rebate checks to individuals. That, of course, is politically unrealistic, especially in an election year when candidates are vying to be voter-friendly. And how better to be voter-friendly than to mail out checks?

Senator Obama wins hands down on being voter-friendly. He wants to spend $75 billion to mail out checks to “those who need it most.” Workers and seniors would get $250, followed by further checks if economic conditions don’t improve.

Senator Clinton prefers to spend a total of $70 billion on a housing fund: $30 billion for those facing foreclosure, $25 billion for energy assistance for 37 million low-income families, $10 billion for extension of unemployment insurance, and $5 billion for energy efficiency tax credits.

The leading Republican candidates, Mitt Romney and Senator McCain, focus on lowering individual income tax rates permanently and expanding business expensing. In addition, Mr. Romney would copy what Mr. Bush did in 2001 by reducing the bottom individual rate to 7.5% and sending out rebate checks to those who earn less than $97,000.

In the end, whatever stimulus package is passed comes down to the decision made by Congress, and, in particular, the chairman of the Ways and Means Committee. How odd that Mr. Rangel would waive his budget rules to send out checks that will have little effect on the economy, but not to make permanent the tax cuts that would make a real difference.

Ms. Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute. She can be reached at dfr@hudson.org.