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by Frank James
Wow, that was fast, especially for this Congress. House Democrats and Republicans have agreed to an economic stimulus deal.
It's amazing what can happen during an election year when the economy is tanking and neither party wants to wear the hair shirt for not doing enough to address the nation's economic woes.
The broad outlines of the deal are being reported by the Associated Press:
By ANDREW TAYLOR, Associated Press Writer
WASHINGTON (AP) — Democratic and Republican congressional leaders reached a tentative deal Thursday on tax rebates of $300 to $1,200 per household and business tax cuts to jolt the slumping economy.
Congressional officials close to the negotiations said House Speaker Nancy Pelosi and Republican Leader John Boehner of Ohio reached agreement in principle in a telephone call Thursday morning.
The officials, speaking on condition of anonymity, said the two wanted key members of their parties to sign off on the approximately $150 billion accord before any announcement.
The development came as the Bush administration, which also has been pushing for a deal, said agreement seemed imminent. "Our understanding is there is no final deal yet but they are making progress," presidential spokeswoman Dana Perino said early Thursday.
Pelosi, D-Calif., agreed to drop increases in food stamp and unemployment benefits during a Wednesday meeting in exchange for gaining rebates of at least $300 for almost everyone earning a paycheck, including low-income earners who make too little to pay income taxes.
Pelosi, answering questions from reporters Thursday after a speech in Washington, said, "I am not confirming anything." But Pelosi added she would have something to say later.
Under the tentative plan, families with children would receive an additional $300 per child, subject to an overall cap of perhaps $1,200, according to a senior House aide who outlined the deal on condition of anonymity in advance of formal adoption of the whole package. Rebates would go to people earning below a certain income cap, likely individuals earning $75,000 or less and couples with incomes of $150,000 or less.
Workers would have to have earned at least $3,000 in 2007 to receive the rebates, the officials said.
The rebate part of the plan would cost about $100 billion, aides said.
The cost of the final business tax break package was less certain. The two leaders agreed to allow businesses to immediately write off 50 percent of purchases of plants and other capital equipment and to permit small businesses to write off additional purchases of equipment. It appeared that a provision to allow businesses suffering losses now to reclaim taxes previously paid might be dropped to reduce the cost of the business package.
Sen. Max Baucus, D-Mont., scheduled a meeting of the Senate Finance Committee for next week to discuss the stimulus package.
"The Senate will want to speak, as well," Baucus said, adding that he and Sen. Charles Grassley of Iowa, the panel's senior Republican, had "agreed to work together, move quickly, and mark up economic stimulus legislation next week."
President Bush has supported larger rebates of $800-$1,600, but his plan would have left out 30 million working households who earn paychecks but don't make enough to pay income tax, according to calculations by the Urban Institute-Brookings Institution Tax Policy Center. An additional 19 million households would receive only partial rebates under Bush's initial proposal.
To address the mortgage crisis, the package also allows Fannie Mae and Freddie Mac — government-sponsored companies that are the two biggest U.S. financers and guarantors of home loans — to buy home mortgages much larger than the current $417,000 limit. Rep. Barney Frank, D-Mass., and chairman of the House Financial Services Committee, said that lending cap might reach as high as $700,000 in areas with the highest home prices.
After a key Wednesday night meeting in which the parameters of an agreement were reached, Pelosi and Boehner spoke again Thursday to cement the accord.
In the talks, Pelosi pressed to make sure tax relief would find its way into the hands of lower-income earners while Boehner pushed to include upper middle-class couples, according to congressional aides.
The emerging package was already drawing fire from liberal activists and labor unions upset that proposals to extend unemployment insurance and boost food stamps had been dropped. Many Democratic lawmakers had assumed those proposals would make it into the package, and critics of the deal said those ideas could pump money into the economy more quickly than tax rebate checks that won't be delivered until June.
Democrats had pressed to extend unemployment benefits for people whose 26 weeks of benefits have run out, but Republicans resisted.
Conservative Republicans were likely to be restless over tax rebates going to those without income tax liability.
Democratic aides said greater GOP flexibility over giving relief to poor families with children — who would not have been eligible under Bush's original tax rebate proposal — was the catalyst that moved the talks forward.
So it sounds like there was a true compromise, with neither side getting all of what they wanted. Conservative Republicans didn't want tax rebates going to workers who didn't pay taxes but yielded on that.
Democrats wanted expansions in food stamps and unemployment benefits but didn't make the fact that they couldn't get that a dealbreaker. As the AP story reports, there will be disappointment about the failure on food stamps and unemployment benefits and it won't be just from organized labor and advocates for the poor.
Many economists had also said that such payments would quickly infuse needed cash into the economy.
The House agreement will allow President Bush to report during his last State of the Union speech Monday evening that real progress has been made and that help is on the way to American consumers and taxpayers.
It will also allow him to raise the heat on the Senate to quickly move the legislative package.
Comments
Hasn't the Loony Left been telling us that lower taxes and tax rebates are a bad thing? That U.S. people keeping or getting more of their money is a bad thing?
Again, and as usual, par for the course, and all of that, the Loons on the Left are WRONG!
What new?
Posted by: John D | January 24, 2008 12:45 PM
Hasn't the Loony Left been telling us that lower taxes and tax rebates are a bad thing? That U.S. people keeping or getting more of their money is a bad thing?
Again, and as usual, par for the course, and all of that, the Loons on the Left are WRONG!
What new?
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Well, certainly dyslien living in a fantasy world isn't new. And of course, his recycling his tired old cliches is also pretty predictable. Never the less, this loony lefty has never said such a thing, so I don't know what parallel universe some people live in, but it's obviously not in this one. The loony left does say lowering taxes on rich folks and keeping them up on middle and poor is a bad thing, maybe that was what you meant. But never mind, I am sure actual logic would never make a dent in your tiny little world view.
In other news, it looks as if your hero's economy is tanking faster and faster every day. From today's Conservabune----
For the year, sales of single-family homes were down by 13 percent, the biggest drop since a 17.7 percent plunge in 1982. The median price for a single-family home dropped 1.8 percent to $217,000.
That was the first annual price decline on records going back to 1968. Lawrence Yun, the Realtors' chief economist, said it was likely that the country has not experienced a decline in housing prices for an entire year since the Great Depression of the 1930s.
Posted by: rncbs | January 24, 2008 1:46 PM
The republicans do a terrible job with the economy and John D spins it as a democratic creation. Amazing.
Posted by: Logic Prisoner | January 24, 2008 1:47 PM
The market rebounded, too.
Posted by: Jeff | January 24, 2008 2:12 PM
The market rebounded, too.
Posted by: Jeff | January 24, 2008 2:12 PM
You want to bet on how long that will last, college Republican boy?
The so-called "surging economy" has always been a paper tiger geared up to make it LOOK like the failing Wingnut fiscal policies were working.
Posted by: John E | January 24, 2008 3:00 PM
I have this strange feeling that the people, such as myself, who's only income is SS, will be left out completely on the tax rebate, as we don't file income. The Washingtonie(government) really don't care about the back bone of the nation, who put that sorry bunch in control. Its all over Oil!!! This election will be a wake up call for the numb nuts...I will vote Democratic for the first time in my life of 74 yrs.
Posted by: Lori Glaziner | January 24, 2008 3:02 PM
Hey John,
Will your $300 rebate make up for your 7.5% salary cut and your mandatory 37 hour work week compliments of Cygnus Media's upper management cut-backs last quarter?
Posted by: The Economy is Great | January 24, 2008 3:08 PM
What happens when China calls in all this money we keep borrowing from it?
Posted by: Paul | January 24, 2008 3:36 PM
Rncbs, please come up with your own material rather than stealing from me.
Illogic Man, please tell me where I say the economy is a democratic creation?
Anyway, the fourth week in a row applications for unemployment insurance dropped. Companies are still raking in profits. Overall, the economy is still in positive territory. In other words, no recession -- yet.
Also, no economy only expands. Expanding economies eventually contract. Bush has experienced over 5 years of growth now. Still a strong record on the economy.
Posted by: John D | January 24, 2008 3:40 PM
Just give me a cut in my federal tax rate please. Why does business get a tax rate cut and individuals only get a one time rebate? Lets count the years that business corps will enjoy that tax break long after many of us have received the one time rebate. Bushwack!
The stock market is not the only measure of American life or prosperity. The markets are less and less of the real picture. Many can see when the sky is falling on Americans well ahead of the old pumped up institutions--that are now on life support.
Posted by: Vivian | January 24, 2008 4:27 PM
Shorter John D-
Yay for massive deficit spending! Screw my kids and grandkids!
Posted by: Translator | January 24, 2008 4:31 PM
Beware the "rebates" they are talking about. If they work like the last two, the following year you get socked right in the taxes! Those were not rebates, they were deferments. I hope they make that perfectly clear this time around.
Posted by: lochnessmonster | January 24, 2008 4:57 PM
The market rebounded, too.
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Yeah, it's up to 12.3. I only need to get another $20k in run up to get back to where I was just a few months ago. Big rebound.
Posted by: rncbs | January 24, 2008 5:50 PM
mcBS,
"The loony left does say lowering taxes on rich folks and keeping them up on middle and poor is a bad thing" - Over 30 million of the lowest wage earners pay NO Federal Income Taxes - how much lower do you want them to go?
House prices also went up very high over the past 2-3 years - its called a bubble. For reference, see the NASDAQ in 2000.
Posted by: Terry | January 24, 2008 6:00 PM
To paraphrase Truman;
''It's a recession when your neighbor loses his job. It's a depression when you lose yours."
This 'rebate' is a bipartisan effort for both parties to 'inoculate' themselves come November.
We are saving ours, if we get it, for a tsunami day.....
Posted by: C.Morris | January 24, 2008 6:20 PM
God bless President Bush for his leadership on the tax rebates. We're just middle income people, but we really can use this boost right now to pay off some medical expenses. And thanks to the leaders in both political parties for supporting the president. You do not know the great impact this will have for the positive for millions of Americans. God bless America!
Posted by: Masterson | January 24, 2008 6:28 PM
it's called a bubble genius because it was allowed to become one. nothing but a shell game from the fed in bed with the worst financial administration ever. the housing market was also the only thing keeping this smoke and mirrors economy going as long as it did.
where do we find proof that 30 million lower wage earners do not pay federal taxes?
Posted by: whaddaeconomy | January 24, 2008 6:53 PM
whadda,
I stand corrected - 50 million, at least according to John Edwards and HillBilly Clinton.
http://blog.washingtonpost.com/the-trail/2008/01/22/democratic_candidates_congress_1.html
Thanks for pointing that out. Old George Bush just gouges the poor and middle class doesn't he?
Posted by: Terry | January 24, 2008 8:57 PM
Republicans and Democrats can bipartisanly agree---to screw the taxpayer.
As they did with this package, which is all election year politics rather than sound fiscal policy.
Posted by: Vinson | January 24, 2008 11:27 PM
Do we know what benefits are being cut to make up for the money being given to us? Not that I'm the slightest bit unhappy at getting money back, but I'm concerned at what was taken away to pay for this -- it's entirely possible the money I get could be a WHOLE lot better used, and could benefit many more people than just me, if it could have funded a public program or been used for equipment for soldiers.
Guaranteed that the money will go toward paying down the principal on my home rather than frivolous stuff (and I don't have outstanding debt that's become problematic, knock wood), so I certainly won't be adding to any "trickle effect."
Posted by: Op109 | January 25, 2008 10:20 AM
I wonder if the salary limits are based on 2006 or 2007 tax returns?
Posted by: Keith | February 7, 2008 3:58 PM
You need to pass an unemployment extension. Things are getting worse, oil is going up, gas is going up and jobs are being cut more and more especially in Western Mass.
Please do something for the unfortunate people who lost their jobs.i
Posted by: Joan S | February 21, 2008 1:26 PM