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Tax rebates deal announced
By ANDREW TAYLOR, Associated Press Writer
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 with Republican Leader John A. Boehner and Treasury Secretary Henry Paulson — "at the earliest date, so that those rebate checks will be in the mail."
The rebates would go to 117 million families, according to a Democratic summary. That includes $28 billion in checks to 35 million working families who wouldn't have been helped by Bush's original proposal, the analysis estimated.
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 rebate part of the plan would cost about $100 billion, aides said. The package also includes close to $50 billion in business tax cuts.
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 Republican-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." He added, "The two caucuses have to come together and to work in a bipartisan way and to reach a compromise that I think is in the best interest of the American people."
Paulson said he would work with the House and Senate to enact the package as soon as possible because "speed is of the essence."
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.
The agreement left some lawmakers in both parties with a bitter taste, complaining 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.
Congressional leaders have reached a deal with the White house on a bipartisan economic stimulus package that is expected to move swiftly through Congress and give most tax filers rebates of $600 to $1,200. WHAT'S IN _Tax rebates: Checks of at least $300 for almost everyone earning a paycheck, including low-income earners who make too little to pay income taxes, so long as they earned at least $3,000 in 2007. Families with children would receive an additional $300 per child, while those paying income taxes could receive higher rebates. The full rebate would be limited to individuals earning $75,000 or less and couples with incomes of $150,000 or less, but a partial rebate would go to individuals earning up to $87,000 and couples earning up to $174,000. The caps are higher for people with children. _Business tax write-offs: Spurring business investments with so-called bonus depreciation and more generous expensing rules. _Housing rescue: Allow more subprime mortgage holders to refinance into federally insured loans by raising the limit on Federal Housing Administration loans from $362,000 to as high as $729,750 in expensive areas. Increase the availability of mortgages by providing 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. WHAT'S OUT _Permanent tax cuts: Republicans conceded that their top priority would have to be left out. _Unemployment insurance: Democrats wanted to extend benefits past 26 weeks. _Food stamps: A boost for benefits. _Medicaid: Democrats gave up on including Medicaid payments to states. _Low-income heating subsidies: Democrats are surrendering the fight to include them. _Infrastructure spending: Spending on transportation or repair projects already under way is off the table. _Republicans' proposal to allow businesses suffering losses now to reclaim taxes previously paid was dropped. (This version CORRECTS housing numbers in paragraph 6.) )
EDITED TO ADD:
Stimulus package: What's in and out
By The Associated Press
No rebate for me. That sucks.
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