Stimulus Plan Vows $600-$1,200 Tax Rebates
Congressional leaders announced a deal with the White House Thursday on an economic stimulus package that would give most tax filers refunds of $600 to $1,200, and more if they have children.
House Speaker Nancy Pelosi said Congress would act on the agreement - hammered out in a week of intense negotiations and uncustomary bipartisanship - "at the earliest date, so that those rebate checks can be in the mail."
But even if Congress does act quickly, the IRS will be bogged down in April handling tax returns and probably couldn't begin to process the rebates until early May, reports CBS News correspondent Anthony Mason. Then comes the mailing, which takes eight to 10 weeks, so most people could have the checks by July.
President Bush praised the agreement at the White House, saying it "has the right set of policies and is the right size."
The rebates, which would go to about 116 million families, had appeal for both Democrats and Republicans. Pelosi's staff noted that they would include $28 billion in checks to 35 million working families who wouldn't have been helped by Mr. Bush's original proposal. Republicans, for their part, were pleased that the bulk of the rebates - more than 70 percent, according to an analysis by Congress' Joint Tax Committee - would go to individuals who pay taxes.
Individuals who pay income taxes would get up to $600, working couples $1,200 and those with children an additional $300 per child under the agreement. Workers who make at least $3,000 but don't pay taxes would get $300 rebates.
The rebates were expected to cost about $100 billion, and the package also includes close to $50 billion in business tax cuts.
The principal players in pulling the deal together were Pelosi, House Republican leader John Boehner and Paulson. The package would allow businesses to immediately write off 50 percent of purchases of plants and other capital equipment and permit small businesses to write off additional purchases of equipment. A GOP-written provision to allow businesses suffering losses now to reclaim taxes previously paid was dropped.
Pelosi, D-Calif., agreed to drop increases in food stamp and unemployment benefits during a Wednesday meeting in exchange for gaining the rebates of at least $300 for almost everyone earning a paycheck, including those who make too little to pay income taxes.
"I can't say that I'm totally pleased with the package, but I do know that it will help stimulate the economy. But if it does not, then there will be more to come," Pelosi said.
Boehner said the agreement "was not easy for the two of us and our respective caucuses."
"You know, many Americans believe that Washington is broken," the Ohio Republican said. "But I think this agreement and I hope that this agreement will show the American people that we can fix it and will serve to move along other bipartisan agreements that we can have in the future."
Paulson said he would work with the House and Senate to enact the package as soon as possible, because "speed is of the essence." But he also cautioned that "the work is far from over."
The Treasury Department has already been talking to the IRS about getting the checks out "as quickly as possible, recognizing that the tax filing season is ongoing," said Treasury spokesman Andrew DeSouza.
The rebates would phase out gradually for individuals whose income exceeds $75,000 and couples with incomes above $150,000, aides said. 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.
"I think this is a good big first step, I think it's the right step," Mark Zandi, chief economist at Moody's Economy.com, told CBS News. "I think for many hard-pressed households, a few hundred dollars in their checking account is going to make a big difference for them."
The agreement left some lawmakers in both parties with a bitter taste, and they complained that their leaders had sacrificed too much in the interest of striking a deal. Many senior Democrats were particularly upset that the package omitted the unemployment extension.
"I do not understand, and cannot accept, the resistance of President Bush and Republican leaders to including an extension of unemployment benefits for those who are without work through no fault of their own," Rep. Charles B. Rangel, D-N.Y., the Ways and Means Committee chairman, said in a statement.
Sen. Max Baucus, D-Mont., the Finance Committee Chairman, said leaving out the unemployment extension was "a mistake," as he announced plans to craft a separate stimulus package in the Senate starting next week.
Majority Leader Harry Reid said the goal is to send the package to the White House by Feb. 15 for Mr. Bush's signature, but he noted the Senate would likely try to add more spending to the package.
"I expect that the (Finance) Committee and other senators will work to improve the House package by adding funds for other initiatives that can boost the economy immediately, such as unemployment benefits, nutrition assistance, state relief and infrastructure investment," Reid said in a statement.
Asked about this, Paulson praised Reid's leadership but said, "I don't know what he has in mind."
Mr. 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 Mr. Bush's initial proposal.
Meanwhile, the housing market keeps getting uglier, reports Mason. New figures show the median price of a single family home actually fell last year for the first time since the Great Depression, while sales plummeted 13 percent - the largest decline in 25 years.
To address the mortgage crisis, the package raises the limit on Federal Housing Administration loans from $362,000 to as high as $729,750 in expensive areas, allowing more subprime mortgage holders to refinance into federally insured loans. To widen the availability of mortgages across the country, it also provides a one-year boost to the cap on loans that Fannie Mae and Freddie Mac can buy, from $417,000 up to $729,750 in high-cost markets.
© 2009 CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report. House Speaker Nancy Pelosi said Congress would act on the agreement - hammered out in a week of intense negotiations and uncustomary bipartisanship - "at the earliest date, so that those rebate checks can be in the mail."
But even if Congress does act quickly, the IRS will be bogged down in April handling tax returns and probably couldn't begin to process the rebates until early May, reports CBS News correspondent Anthony Mason. Then comes the mailing, which takes eight to 10 weeks, so most people could have the checks by July.
President Bush praised the agreement at the White House, saying it "has the right set of policies and is the right size."
The rebates, which would go to about 116 million families, had appeal for both Democrats and Republicans. Pelosi's staff noted that they would include $28 billion in checks to 35 million working families who wouldn't have been helped by Mr. Bush's original proposal. Republicans, for their part, were pleased that the bulk of the rebates - more than 70 percent, according to an analysis by Congress' Joint Tax Committee - would go to individuals who pay taxes.
Individuals who pay income taxes would get up to $600, working couples $1,200 and those with children an additional $300 per child under the agreement. Workers who make at least $3,000 but don't pay taxes would get $300 rebates.
The rebates were expected to cost about $100 billion, and the package also includes close to $50 billion in business tax cuts.
The principal players in pulling the deal together were Pelosi, House Republican leader John Boehner and Paulson. The package would allow businesses to immediately write off 50 percent of purchases of plants and other capital equipment and permit small businesses to write off additional purchases of equipment. A GOP-written provision to allow businesses suffering losses now to reclaim taxes previously paid was dropped.
Pelosi, D-Calif., agreed to drop increases in food stamp and unemployment benefits during a Wednesday meeting in exchange for gaining the rebates of at least $300 for almost everyone earning a paycheck, including those who make too little to pay income taxes.
"I can't say that I'm totally pleased with the package, but I do know that it will help stimulate the economy. But if it does not, then there will be more to come," Pelosi said.
Boehner said the agreement "was not easy for the two of us and our respective caucuses."
"You know, many Americans believe that Washington is broken," the Ohio Republican said. "But I think this agreement and I hope that this agreement will show the American people that we can fix it and will serve to move along other bipartisan agreements that we can have in the future."
Paulson said he would work with the House and Senate to enact the package as soon as possible, because "speed is of the essence." But he also cautioned that "the work is far from over."
The Treasury Department has already been talking to the IRS about getting the checks out "as quickly as possible, recognizing that the tax filing season is ongoing," said Treasury spokesman Andrew DeSouza.
The rebates would phase out gradually for individuals whose income exceeds $75,000 and couples with incomes above $150,000, aides said. 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.
"I think this is a good big first step, I think it's the right step," Mark Zandi, chief economist at Moody's Economy.com, told CBS News. "I think for many hard-pressed households, a few hundred dollars in their checking account is going to make a big difference for them."
The agreement left some lawmakers in both parties with a bitter taste, and they complained that their leaders had sacrificed too much in the interest of striking a deal. Many senior Democrats were particularly upset that the package omitted the unemployment extension.
"I do not understand, and cannot accept, the resistance of President Bush and Republican leaders to including an extension of unemployment benefits for those who are without work through no fault of their own," Rep. Charles B. Rangel, D-N.Y., the Ways and Means Committee chairman, said in a statement.
Sen. Max Baucus, D-Mont., the Finance Committee Chairman, said leaving out the unemployment extension was "a mistake," as he announced plans to craft a separate stimulus package in the Senate starting next week.
Majority Leader Harry Reid said the goal is to send the package to the White House by Feb. 15 for Mr. Bush's signature, but he noted the Senate would likely try to add more spending to the package.
"I expect that the (Finance) Committee and other senators will work to improve the House package by adding funds for other initiatives that can boost the economy immediately, such as unemployment benefits, nutrition assistance, state relief and infrastructure investment," Reid said in a statement.
Asked about this, Paulson praised Reid's leadership but said, "I don't know what he has in mind."
Mr. 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 Mr. Bush's initial proposal.
Meanwhile, the housing market keeps getting uglier, reports Mason. New figures show the median price of a single family home actually fell last year for the first time since the Great Depression, while sales plummeted 13 percent - the largest decline in 25 years.
To address the mortgage crisis, the package raises the limit on Federal Housing Administration loans from $362,000 to as high as $729,750 in expensive areas, allowing more subprime mortgage holders to refinance into federally insured loans. To widen the availability of mortgages across the country, it also provides a one-year boost to the cap on loans that Fannie Mae and Freddie Mac can buy, from $417,000 up to $729,750 in high-cost markets.
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As for common sense it appears that I have far more than you...
You argue about buying a new tv, car or going on vacation...your possibilities are extremely materialistic and self-centered. I''d rather see my money put to better use than that.
Every person in this country who works for a living deserves to make enough money to live on and I don''t care if they scrub toilets with a toothbrush.
FYI...its not the rent, its the skyrocketing oil and gas prices that are killing me and most of the people I know who make two to three times my income. I''d rather see mine and everyone else''s tax rebate go toward bringing those prices back to a realistic level. Then they would really be putting money back into our pockets.
And as for the rest of your blatent and ignorant comments...you have no idea who I am, what my circumstances are or what my educational level is. To build an arguement and attack like that...well that is clearly the definition of pathetic.
I work my *** off and still cannot make ends meet, I%u2019m sick of robbing Peter to pay Paul, I%u2019m sick of people who think I%u2019m slime because the government is going to give me a hand out%u2026I don%u2019t need a hand out, I need a hand up%u2026
A $1200 check is a joke%u2026I%u2019d rather be paid enough from work to at least be able to pay all my bills every month and maybe have a little left to save or perhaps spend if that is what I choose%u2026
How about a livable minimum wage? How about bringing our businesses back to this country and creating a decent job market to rebuild our economy?
This tax rebate *** is just another governmental bait and switch tactic%u2026they%u2019ll hook us now and we%u2019ll all pay for it later.
First of all, if you''re GROSS income for the year was OVER $3,000 dollars then does that mean you''re entitled to a check of at least $600 if you file individually? Or, are they basing it of NET income for the year?
I know it isn''t a ''sure thing'' yet, but I hope someone can clear that up for me.
Thanks.
Thanks
I would think that you, being a democrat, would have fought for me being disabled with the rising energy prices. My wife, because of the laws (time expired) cannot get disability, and I would have like to have spent some money for the economy for things we needed like food and fuel and clothes in the stimulus package not coming to us. We are living hand to mouth this year alone we, I, got a big raise from S.S. $20.00. Are you a republican? I thank you! "Keep up the good work". Does this party really hear the hurting American people? Or are they becoming Republican? As you know I am being sarcastic with these statements.
Please is there anyone in America who would help 45 million people who need help? This is an advertisement for everyone now running for office.
We are Americans!!
I am trying to keep my cell phone minutes to a minimum! For this is all we can afford in respect to a phone!
Why Bash someone were others are also to blame!
slim1h2o
your friend slim
I mean it slim! Thank you for responding to me and all the others who are in my boat. I wish I could Run for President because I would make sure help all the homeless was provided for! I would with the help of experts get the terrorism stop. I would get the 401k and social security mess solved for the younger and the older. I would make sure the economy was balanced for everyone. I would make the decisions necessary for the deployment of justice for everyone in my itinerary!
My husband and I both work full-time jobs, and cannot afford to buy a home of our own, so will probably be renting the rest of our lives - even with the cuts in the mortage rate, inflation and transportation costs to even MAKE it to work are killing us. This is/was one of the richest nations in the world, and we are rapidly losing ground against the world market - take a look at Ohio''s unemployment rate of about 6% - then add in the REAL figures which the govt. airbrushes, and it would more likely be around 12%. We are hemmorhaging jobs here - how will this bandaid help?
Took Bush''s leadership to take us from surpluses to a record deficit, from prosperity to recession, from a respected and feared nation to the laughing stock/whipping boy of the world - glad my parents, who were Republicans, are not alive to see what has happened to the USA.
And your spouse makes?
The long term solution to all of our problems is to do the opposite of greed as follows:
1) Every American to cut their salary to half at least.
2) Every American to work 60 hours at least.
3) Every American to work harder.
4) Eliminate all fringe benefits such as health,dental, vision care.
5) Every American forget about having day offs for vacations and holidays.
6) All CEOs to cut their salaries to less than 185, instead of 385, times the office cleaner salary - just like the Japanese and Chinese today.
Basically, we need to compete producing and stop consuming because at some point, we will have not more $$$ or credit or assets to buy anything period.
This is what our grandparents sacrificed for us. It amazes me how much we all love our children (the next generations) more than we love ourselves.
I partially concur with your statements.
Now, let assume the Bank and that Real Estate Agent, and everyone in between, told you that you cannot afford the highest rate on the mortgage loan. Therefore, they reject your loan application. In this case, the Bank and the Real Estate Agent and everyone in the game do not get their $$$ commissions. There would not be a subprime market period. Consequently, we would not have this mess we are in today.
Congress is already considering (or maybe I missed it-passed) a bill to make it against Federal law for banks to give loans they know the customer/client cannot afford the maximum interest rate on the jumbo loan. Then, this greed loophole is gone.
However, in a Capitalist system, they will find another new greed loophole and another new greed loophole, etc., because they are never happy with the profits they are making. Greed is built-in to the Capitalist system.