Congressional leaders and the White House announced Thursday that they have reached a rare compromise. The tentative deal comes on a package of tax rebates for households and tax cuts for businesses, both meant to give the economy a much-needed jolt.
The measure would mean up to $600 for individuals and twice that for couples who file taxes jointly. Families with children would get an additional $300 per child.
Neither side was completely happy with the agreement, which is likely to be changed once it reaches the Senate. Still, both sides predicted quick passage in the House.
The agreement was largely hammered out Wednesday in a series of meetings with House Speaker Nancy Pelosi, Minority Leader John Boehner and Treasury Secretary Henry Paulson. It was a remarkable display of speed and willingness to compromise — rare commodities in the current Congress.
Speaking less than an hour after the formal agreement was announced at the Capitol, President Bush said the deal met his criteria for a stimulus package that was robust, effective and temporary.
"This package has the right set of policies and is the right size," he said. "The incentives in this package will lead to higher consumer spending and increased business investment this year. Importantly, this package recognizes that lowering taxes is a powerful and efficient way to help consumers and businesses."
Boehner called the deal a big win for the American people.
"You know, many Americans believe that Washington is broken, but I think 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," he said.
The tax rebates will go to some 117 million Americans. Those individuals who don't make enough to pay income taxes will get rebates of $300. The rebates will start to phase out for those who earn more than $75,000 or for couples who earn more than $150,000. Businesses will get tax write-offs that are double what they can take now on new investments, as well as incentives to invest in new equipment.
The measure also contains changes to federal mortgage programs aimed at helping homeowners facing foreclosure to refinance their loans.
Still, Democrats were clearly less than jubilant about the deal.
"I can't say that I'm totally pleased with the package, but I do know that it will help stimulate the economy, and if it does not, then there will be more to come," Pelosi said.
The biggest complaint among Democrats was over what was left out, especially extended unemployment benefits. Charlie Rangel (D-NY) said he did not understand the resistance from the president and Republican congressional leaders to those additional benefits.
Still, Democrats in the House are expected to swallow their disappointments and overwhelmingly approve the package.
Senators, meanwhile, made it clear they would go their own way. Majority Leader Harry Reid said Senate Democrats would like to add a number of programs to the measure and that he considered the bill's $150 billion price tag negotiable.
"That's not a magical figure, and a lot of things that we're talking about here are fairly small — for example, the summer employment program for $500 million."
Sen. Charles Schumer (D-NY) also said that, as far as he was concerned, the House stimulus package needed more.
"Those spending stimuli should focus on unemployment insurance but could be other things — money for summer jobs; money, if it can be spent quickly, for infrastructure; money for nutrition assistance; things like that," he said.
Senate Republicans have signaled that they are unwilling to let the stimulus measure become a vehicle for pet spending programs.
The House is expected to take up the measure during the first week in February, the Senate soon after. Depending on the outcome, Paulson says consumers could start getting checks in May.
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