By Jennifer Yousfi
President Bush and House leaders announced they had come to an agreement on an economic stimulus package that would give most taxpayers refunds of $600 to $1,200 – and more if they have children – by as early as May.
In addition to rebate checks for 117 million working families, the plan will include incentives for businesses to make capital equipment investments.
"The country needs this boost to the economy now," President George W. Bush said in a White House statement. The agreement will result in "higher consumer spending and increased business investment this year," he added.
Individuals would be eligible for tax rebates of $300 to $1,200. The original plan was expanded to include lower-income workers who earn as little as $3,000 and, therefore, paid no income tax in 2007.
Individuals who paid income taxes would receive up to $600 in rebates, while married couples would receive $1,200. Taxpayers with dependent children would get an extra $300 rebate per child.
In addition, businesses would receive a 50% write-off on capital equipment investments made in 2008. Republicans on the Joint Economic Committee said similar tax breaks in 2003 helped to boost employment by 100,000 to 200,000, MarketWatch reported.
Finding themselves in an election year with a faltering economy, both parties are rushing to approve a plan to appease voters worried about a U.S. recession. Treasury Secretary Henry Paulson said the rebate checks could be mailed quickly, just 60 days after the law is enacted.
"This is on a fast track," Paulson affirmed, speaking at a press conference with House Speaker Nancy Pelosi and House Minority Leader John Boehner.
The plan is a rare example of bipartisan cooperation, as both parties conceded to drop desired provisions that towed their party line. The current plan does not contain an extension of unemployment benefits, which had been considered by the Democrats.
And the Republicans did not find support for an extension of the 2001 and 2003 tax cuts that are scheduled to expire in 2011.
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