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WASHINGTON -- Members of Congress and the Bush administration reached a tentative agreement yesterday on a nearly $145 billion economic stimulus package created to spark the economy by offering rebates to consumers, while providing businesses with one-time incentives, the Washington Post reported.
The deal was reached after late-night negotiations between House Speaker Nancy Pelosi (D-Calif.), House Minority Leader John A. Boehner (R-Ohio), and Treasury Secretary Henry M. Paulson Jr., the report stated.
The deal required much compromise. Democrats threw out plans to extend unemployment benefits and food stamps, while Republicans agreed to offer rebates as large as $1,000, and allowing the rebate to include working families that earn too little to pay income tax, according to the Post report.
"When all the numbers are tallied, this will be the most progressive economic package we have seen in years," a senior House Democrat told the newspaper.
Additional provisions would allow faster tax write-offs for corporate investment and immediate tax deductions for small-business investments in plants and equipment, the report stated. In addition, businesses would be able to take tax deductions in 2008 on operating losses from up to five years ago, the paper reported.
With this agreement, nearly all U.S. consumers earning a paycheck would receive at least $300 from the Internal Revenue Service, while most workers would receive rebates of $600 each, or $1,200 per couple, according to the report.
Families with children would receive an additional $300 per child, while workers who earned at least $3,000 in 2007, but not enough to pay income taxes, would be eligible for $300, the Post reported. Rebates would be limited to those taxpayers who earned up to $75,000 or couples with incomes of as much as $150,000, the report stated.
The National Retail Federation welcomed the agreement, and its senior vice president for government relations, Steve Pfister, called it "simple" and "targeted," in a letter to Pelosi.
"The proposal put forth today is simple, targeted economic stimulus that will quickly put money into consumers' pockets where it can boost economic growth by creating demand throughout all sectors of the economy," he said. "Given the financial stress that consumers will be under in the coming year, stimulus legislation is essential to the health of our nation's economy and to the jobs that rely upon the strength of that economy."
House Democrats confirmed that the package must go through the Senate, where Democrats could add additional provisions, according to the report.
"The Senate will want to speak as well. We want to ensure that Congress does its utmost for the American economy and for the American people," Senate Finance Committee Chairman Max Baucus (D-Mont.) announced, adding that his committee would draft its own stimulus bill next week, the Post reported.