MoneyNews
Thursday, Jan. 24, 2008
WASHINGTON — Democrats running Congress and the Bush administration reached a tentative deal Thursday on $300-$1,200 tax rebates and business tax cuts to jolt the slumping economy.
House Speaker Nancy Pelosi agreed to drop increases in food stamp and unemployment benefits during the Wednesday meeting in exchange for gaining rebates of at least $300 for almost everyone earning a paycheck, including low-income earners who make too little to pay income taxes.
Families with children would receive an additional $300 per child, subject to an overall cap of perhaps $1,200, according to a senior House aide who outlined the deal on condition of anonymity in advance of formal adoption of the whole package. Rebates would go to people earning below a certain income cap, likely individuals earning $75,000 or less and couples with incomes of $150,000 or less.
The emerging package was already drawing fire from liberal activists and labor unions upset that proposals to extend unemployment insurance and boost food stamps had been dropped. They said those ideas could pump money into the economy more quickly than tax rebate checks that won’t be delivered until June.
Conservative Republicans were likely to be restless over tax rebates going to those without income tax liability.
Democratic aides said greater GOP flexibility over giving relief to poor families with children — who would not have been eligible under President Bush’s original tax rebate proposal — was the catalyst that moved the talks forward.
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