Congress, Bush Agree on Economic Stimulus Package
First posted on 01-25-2008
What will the package mean for you?
In a deal struck with the Bush administration, Congressional leaders announced an economic stimulus package that would provide tax refunds of $600 to $1,200 for most taxpayers and even greater amounts for families with children.
House Speaker Nancy Pelosi promised fast action on the bill “so that those rebate checks will be in the mail.”
President Bush praised the agreement that was hashed out during intense negotiations between Pelosi, Republican House Leader John Boehner and Treasury Secretary Henry Paulson.
About 116 million families would benefit by the tax rebate checks. The largest share of the money goes to people who pay income taxes. Under the bipartisan plan:
• Individuals who pay income taxes should receive up to $600.
• Working couples who pay taxes are scheduled to get $1,200.
• Working couples who pay taxes and have children would get an additional $300 per child.
• People who make at least $3,000 in income but do not pay taxes could get $300.
Checks are expected to be distributed in June.
The rebates phase out gradually for individuals whose income exceeds $75,000 and for couples with incomes above $150,000. Individuals with incomes up to $87,000 and couples up to $174,000 would get partial rebates. The caps are higher for those with children.
The stimulus package will cost the government $150 billion. $100 billion of that will be in the form of the tax rebate checks to families and individuals. The other $50 billion will be in the form of tax cuts for businesses.
Those cuts include the opportunity to immediately write off 50 percent of the cost of purchasing manufacturing facilities and other capital equipment. Small businesses would also be able to write off the cost of equipment purchases.
While neither Republicans nor Democrats got everything they wanted in the deal, many saw the accord as at least a start. “I can’t say that I’m totally pleased with the package,” Pelosi said. “But I do know that it will help stimulate the economy. But if it does not, then there will be more to come.”
Other lawmakers, mostly Democrats, were critical that too much was dealt away and were displeased that the extension of unemployment benefits was not left in the final bill. Several said that those benefits would pump money into the economy faster than rebate checks that would not reach individuals until summer.
But Paulson said that “speed is of the essence” and indicated his department was already in talks with the IRS about getting the checks out as soon as possible. He also said he would work closely with the House and the Senate to enact the package quickly.
Senate Majority Leader Harry Reid said that the goal is to get the bill ready for Bush’s signature by February 15. But he did indicate he thought the Senate would try to tack on more spending, primarily for extension of unemployment benefits and for highway projects.
The stimulus package also tries to address the mortgage crisis and subsequent housing market collapse by significantly raising the limits on FHA, Fannie Mae and Freddie Mac loans, as high as $725,000 in some areas. That is almost double the previous limits.
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Comments:
If President Bush signs the Economic Stimulas Package bill on February 15th when does the increase in conventional mortgage loan limit take effect and for how long ?
I think the mortgage loan issue is separate from the stimulus package. Bush proposed a temporary fix for the mortgage loan debacle but it did not get a warm reception in Congress or with Wall Street.
I phoned my U.S. Senator’s office in Washington D.C.
They said that the mortgage loan issue IS written into the bill at this time but the bill is not even in draft form as of yet so as to if it even survives (according to them) is questionable.
Wow, I didn’t realize that was a part of the proposed bill.
I do understand that a group of Democratic Senators has designed their own version of an economic stimulus package with more money aimed at fixed income retirees and extended unemployment benefits.
It could take a while to sort it all out and actually pass the bill - whichever one it is.