WASHINGTON (Reuters) - A majority of Americans expect a recession in the next year as the housing downturn deepens, inflation rises and credit conditions tighten, a Reuters/Zogby poll released on Wednesday showed.

The survey of 1,105 likely voters found that 54 percent thought a recession was looming. It was the first time since the recession question was added to the monthly poll in September that more than half predicted such a downturn.

As economic anxiety grows, nearly half of those surveyed said they planned to use their government rebate checks to pay down debt or pad savings. That would blunt the impact of the $168 billion stimulus plan that President George W. Bush signed into law last week in a bid to stave off a recession.

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"There are hard times ahead. It's a good time to get out of debt if you've got a freebie coming," pollster John Zogby said.

When asked about how they would use rebate checks worth up to $600 per individual and $1,200 per couple, just 16 percent said they would spend it all, and a similar number intended to save it all. Nearly one in three said they would pay down debt, while 27 percent said they would spend some and save some.

The stimulus plan was aimed at bumping up consumer spending to bolster the economy. If households instead save the money or use it to reduce debt, the economic boost will be limited.

Economic worries have supplanted the Iraq War as the top issue in this year's U.S. presidential election as the housing market fallout takes its toll. Less than one in four gave the Bush administration high marks for U.S. economic policy.

Americans remained downbeat about housing, with three out of four expecting home prices to hold steady or fall in the next year. That was little changed from a month ago.

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