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Congress agrees on bill to stimulate US economy

Latest update : 2008-02-11

The revamped version of the bill backed by the Senate's Democrats Wednesday will inject $152 million in the country's troubled economy and aims at boosting consumer spending and business investment.

WASHINGTON, Feb 7 (Reuters) - The U.S. Congress passed a
nearly $152 billion plan on Thursday to stave off an
election-year recession by sending government rebate checks to
millions of Americans and providing business tax incentives to
boost spending.
 

Moving quickly to get the economic package to President
George W. Bush, the House of Representatives passed the bill by
380-34, just hours after the Senate cleared the measure on a
vote of 81-16. Bush is expected to sign the bill next week.
 

The legislation will provide one-time rebates of up to $600
for individuals or $1,200 for couples, plus $300 for each
child. Low-income people, including retirees on Social Security
and disabled veterans who pay no income taxes, would receive
checks of $300. The rebates would start to phase out for people
with taxable incomes of more than $75,000 for individuals and
$150,000 for couples.
 

At a news conference with congressional leaders, Treasury
Secretary Henry Paulson said the rebate checks would go to more
than 130 million Americans. "We're going to have the checks out
beginning of May and this is largely going to be done by the
time summer's over," he added.
 

Bush praised the final package.
 

"This plan is robust, broad-based, timely, and it will be
effective," he said in a statement. "This bill will help to
stimulate consumer spending and accelerate needed business
investment."
 

The final bill was broader than the original House-passed
package backed by Bush. The Senate added the elderly and
disabled veterans who had been left out of the House bill. To
win more Republican support in the closely divided Senate,
Democrats had to drop demands for benefits for long-term
unemployed workers and other provisions that would have helped
low-income people pay heating bills and home builders write off
current year losses against previous tax years.
 

The Senate also added language to help ensure illegal
immigrants did not receive rebate checks.
 

The bill will inject nearly $152 billion into the economy
this year and more than $16 billion next year.
 

UNUSUAL SPEED
 

With all 435 members of the House and one-third of the
100-member Senate up for re-election in November, the
legislation moved through Congress with unusual speed and rare
cooperation between the two parties.
 

Senate Majority Leader Harry Reid, a Nevada Democrat, said
the stimulus package approved by the Senate would "change the
economic direction of this country" and added lawmakers likely
would do more this year to stimulate the economy.
 

The latest economic data suggest the U.S. economy is
stalling. Pending sales of previously owned homes fell by 1.5
percent in December and were off a sharp 24 percent from a year
ago, the National Association of Realtors said on Thursday.
 

At the same time, the Labor Department said the number of
workers drawing jobless benefits had hit a 2-1/4-year high and
major retailers reported a slowdown in consumer spending.
 

Lawmakers hope the rebate checks and incentives for
business investments will send Americans on a shopping spree
that will help jump-start the economy.
 

The bill also provides for higher loan limits for the
Federal Housing Administration insurance program and mortgage
financing giants Fannie Mae and Freddie Mac to help lift the
sagging housing market.
 

Even as Congress acted on the bill, some lawmakers were
discussing a possible second package to help the economy.
 

Senate Finance Committee Chairman Max Baucus, a Montana
Democrat, said Congress would move more stimulus legislation
"if the economy continues to go south, if there are significant
increases in foreclosures and bankruptcies and so forth."
 

Reid said Republican opposition to expanded unemployment
benefits and aid to low-income families for paying winter
heating bills would haunt them in the November elections.
 

"They are following this president right off a cliff," Reid
said.
 

Senate Republican Leader Mitch McConnell of Kentucky said
the economic package transcended politics.
 

"This is not a victory for Republicans or Democrats. This
is a victory for the American people," McConnell said.
 

Reid and other Democratic senators said they would try to
move legislation later this year expanding unemployment
benefits and helping the housing industry.
 

Date created : 2008-02-08

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