"Tentative Deal on Economic Stimulus Plan"
- From: Doobie Keebler <dan.ader@xxxxxxxxx>
- Date: Thu, 24 Jan 2008 11:26:31 -0800 (PST)
Yay! $300 Bucks! We're saved!
Thank you, Mr. Pretzdint!
http://www.nytimes.com/2008/01/24/washington/24cnd-econ.html?_r=1&hp=&oref=slogin&pagewanted=print
The New York Times
January 24, 2008
Tentative Deal on Economic Stimulus Plan
By DAVID M. HERSZENHORN
WASHINGTON -- House leaders and the White House on Thursday reached a
tentative agreement on an economic stimulus package of roughly $150
billion that would pay stipends of $300 to $1,200 per family and
provide tax incentives for businesses to encourage spending.
A House aide close to the negotiations said that Speaker Nancy Pelosi
of California and the Republican leader, Representative John A.
Boehner of Ohio, reached the accord after Ms. Pelosi agreed not to
include two proposals that had broad support among Congressional
Democrats: an extension of unemployment benefits and a temporary
increase in food stamps.
In exchange for those concessions, the Bush administration and House
Republicans agreed that the stipend of at least $300 would be paid to
all workers who earned at least $3,000 last year, even those who did
not earn enough to pay taxes.
"The vast majority of low-income people are going to get a minimum of
$300," said a White House official familiar with the accord, which was
announced at an afternoon news conference by Ms. Pelosi, Mr. Boehner
and Treasury Secretary Henry M. Paulson Jr. at the Capitol.
Workers who paid income taxes could receive more than $300, and
families with children would receive an additional $300 per child, up
to a cap of $1,200. The stipend, which some lawmakers were calling a
"tax rebate," would be subject to income limits so that the wealthiest
taxpayers would not receive it. The White House official familiar with
the outlines of the accord said that payments would go to individuals
earning up to $75,000 and couples earning up to $150,000. He said
roughly two-thirds of the overall package would be aimed at individual
taxpayers and one-third at businesses.
Senators Harry Reid of Nevada, the Democratic majority leader, and
Mitch McConnell of Kentucky, the Republican minority leader, have yet
to give their approval to the accord. But, while there may be some
wrinkles to iron out between the House and Senate, there was nothing
to suggest any disagreement so severe as to be a potential deal
breaker.
Republicans immediately cheered the deal as "tilted toward taxpayers"
and avoiding "extraneous spending" on unemployment benefits, food
stamps, or infrastructure projects, which some Democrats had said
should be included in a stimulus package.
But it was unclear how the package, without extended unemployment
benefits or increased food stamps, would be received by Democrats in
the Senate, including Senator Edward M. Kennedy of Massachusetts and
Senator Charles E. Schumer of New York, who have said that those
proposals offered the best prospects for quickly injecting added
spending into the economy.
Senator Max Baucus, the Montana Democrat who is chairman of the
Finance Committee, reiterated his interest in extending unemployment
benefits at a hearing on Thursday morning, where he said his committee
would mark up a fiscal stimulus bill next week.
"There are reports that a deal may be close on the House side," Mr.
Baucus said. "The Senate will want to speak, as well."
That announcement of potential action by the Finance Committee could
jar Democratic leaders who have been striving for a carefully
coordinated effort on the economy. Earlier this week, Mr. Reid
announced that the House would take the lead in developing the
stimulus package and would conduct the immediate negotiations with the
White House and Congressional Republicans.
Noting that tax rebates were one potentially cost-effective method to
spur new spending, Mr. Baucus said: "Another example would be
expanding unemployment insurance benefits. In recent recessions,
Congress has extended the number of weeks that unemployed workers
could receive benefits. We could do that again. We could provide a
further extension for recipients in high unemployment states. And we
could also temporarily increase the dollar amount of benefits to help
unemployed workers to pay their bills."
"Unfortunately, under current law, fewer than 4 in 10 unemployed
workers receive unemployment insurance benefits," Mr. Baucus
continued. "To address this problem, we could extend eligibility. For
example, we could extend benefits to part-time workers."
Mr. Schumer, at the same hearing, also lamented Ms. Pelosi's
concession on unemployment benefits, but said he hoped that
cooperation on a quick stimulus plan would continue. "While I may not
agree with every element of the package -- such as the decision to
leave out extended unemployment benefits, which economists say would
give us the greatest bang for the buck -- there are some very positive
developments around the tax rebate for families," he said. "I
encourage everyone to keep working in a bipartisan way."
Ms. Pelosi met three times on Wednesday with Treasury Secretary Henry
M. Paulson Jr. and Mr. Boehner, who have served as chief architects of
the plan in a rare show of bipartisanship.
Ms. Pelosi declined immediate comment Thursday morning, but told
reporters she would have something to say later in the day.
On her way into a meeting Wednesday evening, Ms. Pelosi signaled that
a deal might be close when she said there had been "tremendous"
progress during the day.
"I'm hopeful," she said. "We're still working through."
Mr. Bush, after meeting on Wednesday with mayors from across the
country, said he was optimistic about reaching swift agreement on a
stimulus plan.
"I talked to them about my desire to work with the Congress to get a
stimulus package passed, one that's going to be robust enough to
affect the economy, simple enough for people to understand it and
efficient enough to have an impact," Mr. Bush said. "And I'm confident
that we can get something done."
Democratic leaders said that to speed the economic rescue package they
would mostly bypass the usual committee process. Lawmakers said that
they hoped the plan could be approved by mid-February and that it
would be sufficient to soften an economic downturn and forestall a
recession.
"One of the principal tenets of the administration and of ourselves is
we have got to do this fast," Representative Steny H. Hoyer of
Maryland, the majority leader, said Wednesday. "To go through the
regular process and have hearings and have mark-ups and subcommittee
mark-ups, obviously we would be to some degree twiddling our thumbs
while the economy burns."
While Mr. Paulson, Ms. Pelosi and Mr. Boehner were the chief
negotiators, other lawmakers have sought to take a strong hand in the
process.
Representative Charles B. Rangel of New York, the chairman of the Ways
and Means Committee, was said to be lobbying intensively for any
payment to be sent to all low-income Americans, including those who
did not pay any taxes last year. Some Republicans say benefits should
be only for taxpayers.
In a statement Mr. Rangel said, "We must follow the guidance of so
many economists who have said, with great clarity, that this package
must put money back into the hands of the middle- and lower-income
families who will then spend it directly into our economy."
The progress toward a stimulus plan came as the Congressional Budget
Office revised its economic projections to give a gloomier assessment
of the economy, including a widening budget deficit and the first
decline in corporate tax revenue since 2003.
The grimmer outlook prompted Senator Kent Conrad of North Dakota,
chairman of the Budget Committee, to declare that a short-term
stimulus package was insufficient.
"In addition to developing a bipartisan stimulus package," Mr. Conrad
said, "we also must work together to tackle the long-term fiscal
challenges we face with the coming retirement of the baby boom
generation. The American people rightly expect that we will come
together to address these two significant challenges."
House conservatives raised alarms about the emerging economic
legislation, saying they feared it would focus too much on tax rebates
and not enough on tax incentives to encourage businesses to create
jobs.
They said any package should include provisions that would reduce the
corporate tax rate, adjust capital gains for inflation and lower the
capital gains rate for corporations.
"Giving temporary tax rebate checks to families, as important as that
is, is not the same as economic growth," said Representative Jeb
Hensarling of Texas, chairman of the Republican Study Committee. "If
you're going to have an economic stimulus package, it ought to contain
some economic stimulus."
.. da
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