Congress seals the deal on rebates
Both chambers pass final $170 billion plan aimed at boosting the economy. Next stop: White House. Swift action expected.
NEW YORK (CNNMoney.com) -- The House and Senate on Thursday overwhelmingly approved a roughly $170 billion plan aimed at spurring the economy by sending rebate checks to millions of taxpayers, offering tax breaks to businesses and trying to ease the home lending crunch.
The bill would give one-time rebates to 117 million low- and middle-income households, 20 million senior citizens living off of Social Security, and 250,000 disabled veterans.
In addition, the package - approved in back-to-back votes - provides temporary tax breaks for businesses and contains two measures aimed at helping homeowners get or refinance mortgages in higher cost markets.
President Bush is expected to sign the measure next week. The Treasury Department could begin mailing out rebate checks in May.
The president expressed his support of the bill. "This plan is robust, broad-based, timely, and it will be effective," Bush said in a statement. "This bill will help to stimulate consumer spending and accelerate needed business investment."
The goal of the legislation is to boost the flagging economy by putting cash in the hands of consumers while giving businesses financial incentives to invest in plants and equipment and create jobs.
Amid a series of grim reports that the economy was in trouble, House lawmakers and Bush administration officials came together last month in an unusual display of cooperation to broker a bipartisan House bill. In the past two weeks, however, the debate grew more contentious as Senate Democrats tried to add provisions to the House bill.
The final bill is a pared down version of a $200 billion bill that Senate Democrats had been pushing. That bill would have included a 13-week extension of unemployment benefits, heating aid subsidies and rebates to higher-income households. The one addition that did survive - and which most lawmakers agree improved the House bill - was an allowance that makes low-income seniors and disabled vets eligible for a rebate.
"This is crucial part of our jobs agenda for America," said House Speaker Nancy Pelosi, D-Calif., in a statement. "It will help get our economy back on track and help families who are struggling with the high cost of energy, housing, health care, and groceries."
Here's a breakdown of the final bill's main provisions:
Tax rebates to 137 million people. A rebate of up to $600 would go to single filers making less than $75,000. Couples making less than $150,000 would receive rebates of up to $1,200. In addition, parents would receive $300 rebates per child.
Tax filers who do not owe income taxes but have at least $3,000 in income would get a $300 rebate.
The IRS will start sending out checks in early May, said Treasury Secretary Henry Paulson.
"Payments will be largely completed this summer, putting cash in the hands of millions of Americans at a time when our economy is experiencing slower growth," Paulson said in a statement.
Business tax breaks. The bill would temporarily provide more generous expensing provisions for small businesses in 2008 and let large businesses deduct 50% more of their assets if purchased and put into use this year.
Housing provisions. The bill calls for the caps on the size of loans that may be purchased by Fannie Mae (FNM) and Freddie Mac (FRE, Fortune 500) to be temporarily raised from the current level of $417,000 to nearly $730,000 in the highest cost housing markets.