Raven
Friday, February 8th, 2008, 12:59 AM
WASHINGTON — More than 130 million households will get rebate checks this spring and summer as part of a package approved by the Senate on Thursday intended to boost the faltering U.S. economy.
Acting just three weeks after President Bush first proposed infusing the economy with $150 billion, the Senate added rebates for 20 million seniors and 250,000 disabled veterans to a package passed by the House last week. It’s estimated to cost $168 billion over two years.
“This plan is robust, broad-based, timely, and it will be effective,” Bush said in a statement on Thursday. “This bill will help to stimulate consumer spending and accelerate needed business investment.”
Bush could sign the measure as early as Friday, but it will take the Internal Revenue Service two to four months to get rebate checks into the mail. Most single taxpayers will get $600 and couples $1,200, plus $300 for each child under 17.
Anyone with at least $3,000 in earned income last year will get $300, even if they paid no income taxes. The rebates phase out beginning at $75,000 in adjusted gross income for individuals and $150,000 for couples.
The House bill left out seniors on Social Security, but senators insisted on adding them. Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, said seniors spend 92% of their income annually.
Barbara Kennelly, president of the National Committee to Preserve Social Security and Medicare, said “seniors need the money, will spend the money and can contribute to this economic recovery effort.”
Senate Democrats were unsuccessful in adding other provisions that would have helped the unemployed, homeowners facing foreclosure and people struggling to pay heating bills. They vowed to include those and other provisions in a second measure later this year.
Despite disagreements over the additional items, Congress acted in unusual bipartisan spirit on the compromise measure, which also includes about $50 billion in business tax breaks as well as the rebates. Senate action Thursday came on an 81-16 vote; the House had voted 385-35 last week.
The money being sent from Washington represents about 1 percent of the nation’s gross domestic product, and many economists said it should have a measurable impact. Nigel Gault, chief U.S. economist at Global Insight, projected consumer spending growth of 4.8 percent in the third quarter, up from 2 percent in the last quarter of 2007.
Mark Zandi, chief economist at Moody’s Economy.com, said the package “could make the difference between a short or long recession, or a mild to severe recession.” It won’t forestall any recession, he said, “because the benefits don’t accrue until this summer or fall.”
The package represents a classic compromise, which the White House and Congress have seldom produced since Democrats won control last year.
Democrats, led by House Speaker Nancy Pelosi, D-Calif., insisted that rebates go even to low-income households that paid no income taxes last year. Republicans, led by House Minority Leader John Boehner, R-Ohio, insisted on a healthy dose of business tax breaks, such as accelerated depreciation.
Despite the bipartisanship, however, Sen. Charles Schumer, D-N.Y., warned Republicans could pay at the polls after blocking an attempt by the Democrats on Wednesday to add about $40 billion in additional provisions. The Democratic Senatorial Campaign Committee criticized four GOP senators up for re-election.
“While it was substance, totally substance, that motivated our package, the political chips will fall where they may,” Schumer, who chairs the Democrats’ campaign panel, said during the debate.
Minority Leader Mitch McConnell of Kentucky called the compromise “an opportunity to demonstrate to the public that we could come together, do something important for the country, and do it quickly.”
Source (http://www.freep.com/apps/pbcs.dll/article?AID=/20080207/NEWS07/80207085/1001/NEWS)
Acting just three weeks after President Bush first proposed infusing the economy with $150 billion, the Senate added rebates for 20 million seniors and 250,000 disabled veterans to a package passed by the House last week. It’s estimated to cost $168 billion over two years.
“This plan is robust, broad-based, timely, and it will be effective,” Bush said in a statement on Thursday. “This bill will help to stimulate consumer spending and accelerate needed business investment.”
Bush could sign the measure as early as Friday, but it will take the Internal Revenue Service two to four months to get rebate checks into the mail. Most single taxpayers will get $600 and couples $1,200, plus $300 for each child under 17.
Anyone with at least $3,000 in earned income last year will get $300, even if they paid no income taxes. The rebates phase out beginning at $75,000 in adjusted gross income for individuals and $150,000 for couples.
The House bill left out seniors on Social Security, but senators insisted on adding them. Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, said seniors spend 92% of their income annually.
Barbara Kennelly, president of the National Committee to Preserve Social Security and Medicare, said “seniors need the money, will spend the money and can contribute to this economic recovery effort.”
Senate Democrats were unsuccessful in adding other provisions that would have helped the unemployed, homeowners facing foreclosure and people struggling to pay heating bills. They vowed to include those and other provisions in a second measure later this year.
Despite disagreements over the additional items, Congress acted in unusual bipartisan spirit on the compromise measure, which also includes about $50 billion in business tax breaks as well as the rebates. Senate action Thursday came on an 81-16 vote; the House had voted 385-35 last week.
The money being sent from Washington represents about 1 percent of the nation’s gross domestic product, and many economists said it should have a measurable impact. Nigel Gault, chief U.S. economist at Global Insight, projected consumer spending growth of 4.8 percent in the third quarter, up from 2 percent in the last quarter of 2007.
Mark Zandi, chief economist at Moody’s Economy.com, said the package “could make the difference between a short or long recession, or a mild to severe recession.” It won’t forestall any recession, he said, “because the benefits don’t accrue until this summer or fall.”
The package represents a classic compromise, which the White House and Congress have seldom produced since Democrats won control last year.
Democrats, led by House Speaker Nancy Pelosi, D-Calif., insisted that rebates go even to low-income households that paid no income taxes last year. Republicans, led by House Minority Leader John Boehner, R-Ohio, insisted on a healthy dose of business tax breaks, such as accelerated depreciation.
Despite the bipartisanship, however, Sen. Charles Schumer, D-N.Y., warned Republicans could pay at the polls after blocking an attempt by the Democrats on Wednesday to add about $40 billion in additional provisions. The Democratic Senatorial Campaign Committee criticized four GOP senators up for re-election.
“While it was substance, totally substance, that motivated our package, the political chips will fall where they may,” Schumer, who chairs the Democrats’ campaign panel, said during the debate.
Minority Leader Mitch McConnell of Kentucky called the compromise “an opportunity to demonstrate to the public that we could come together, do something important for the country, and do it quickly.”
Source (http://www.freep.com/apps/pbcs.dll/article?AID=/20080207/NEWS07/80207085/1001/NEWS)