Stimulus deal may be near
Treasury Secretary Henry Paulson works 'frantically' with lawmakers to hammer out the final details of a plan to boost economic activity.
WASHINGTON (CNN) -- Treasury Secretary Henry Paulson ended his third meeting of the day with House leaders Wednesday night with no indication of a deal on an economic stimulus package, although a GOP leader told reporters more public comments could be expected Thursday morning.
House Minority Leader John Boehner, R-Ohio, who spent an hour and a half with Paulson and House Speaker Nancy Pelosi, D-Calif., on Capitol Hill Wednesday night, would not say if leaders were close to a deal.
"We're hopeful," he said. "We'll have more to say tomorrow morning."
Pelosi would not answer questions about any announcement of a deal.
"We're moving toward that," she said. "We're not at that place yet."
The late-night negotiations are a sign of the urgency of the talks on a $150 billion stimulus package with the United States slogging through an economic slowdown.
Aides in both parties said Paulson has been frantically working the phones in recent days, as he tries to make progress in the talks before House Republicans head out of Washington for a legislative retreat at the end of the week.
One senior administration official cautioned that despite some progress in the talks, "it may be too ambitious" to expect a final deal by the end of this week. The official, as well as several aides on Capitol Hill, said an agreement is more likely next week.
Asked whether lawmakers in both parties are moving quickly because they're afraid of the wrath of angry voters, one senior Democratic aide said, "No truer words have been spoken."
A top Republican aide added that given the fluctuations in the markets, "everyone wants to get this through as quickly as possible."
While the final details are still being negotiated, officials in both parties said the current outlines of the package would give individuals a tax rebate check in the neighborhood of $800, while families could receive up to $1,600.
To win over conservatives, the package is also slated to include business tax breaks, according to officials in both parties. The officials added that the package currently includes an extension of unemployment benefits and an increase in food stamps to sweeten it for liberals.
The stimulus package may also face resistance from fiscal conservatives in both parties over worries that it would increase the federal debt. The talks are occurring as auditors report that the federal deficit - the difference between what the federal government takes in and what it spends - is increasing.
The nonpartisan Congressional Budget Office estimated Wednesday that the deficit for the current fiscal year will jump to $250 billion, mainly due to a weakening economy. That estimate does not include any additional spending that would be part of a stimulus package.
The stimulus proposal is intended to address economic worries stemming from a worldwide credit crunch created by the mortgage crisis and plunging stock markets. President Bush proposed the package on Friday.
The main sticking point in the negotiations is who the rebate checks should target. Bush has said he wants rebates for those who pay income taxes.
But Democrats contend such an approach would mean tens of millions of households would get only a partial rebate or none at all - about 65 million, the liberal Center for Budget and Policy Priorities estimates.
That group includes those whose tax bill is so low that their rebate would be much less than $800 or $1,600, as well as low-income households with no income tax liability because of credits and other tax breaks. It would also include households that do not have to file a tax return.
At the very least, Democrats say, every worker who pays Social Security taxes should get a rebate. The payroll tax - 6.2 percent of a worker's wages - is what's taken out of paychecks to fund Social Security, no matter a worker's annual income. The same family that may owe no income tax nevertheless has, in most cases, paid 6.2 percent of its income into Social Security.
Officials in both parties credited Paulson, the former Goldman Sachs executive known for a shrewd grasp of the markets, with pushing the package very aggressively.
"He's been on the phone with practically every member of Congress - some of them a few times," said one Senate Republican aide. "He's not fooling around."
The current strategy is for Pelosi and Boehner to iron out the details with Paulson as soon as next week and then get the package passed in the House by the first week of February, according to officials in Congress and in the Bush administration. That will then pressure the Senate to pass the same version by mid-February before lawmakers leave town for the Presidents' Day recess.
Even if that goal is reached, however, Bush administration officials acknowledge it may take several more weeks before the Treasury Department can actually cut the rebate checks and get them in the mail for consumers - a task that will be more difficult because the Internal Revenue Service is very busy now dealing with 2007 tax returns.
One senior official noted the president signed a similar 2001 round of tax rebates around Memorial Day, after the IRS's busy season.
"We're working with the IRS right now to figure this out," the official noted.