US lawmakers approve tax rebates, business breaks
WASHINGTON (AP) — Democratic and Republican congressional leaders reached a tentative deal today on tax rebates of $300 to $1,200 per family and business tax cuts to jolt the slumping economy.
Congressional officials close to the negotiations said House Speaker Nancy Pelosi and Republican Leader John Boehner of Ohio reached agreement in principle this morning.
The officials, speaking on condition of anonymity, said the two wanted key members of their parties to sign off on the accord before any announcement.
The movement came as the White House said agreement seemed imminent. “Our understanding is there is no final deal yet, but they are making progress,” presidential spokesman Dana Perino said early today.
Pelosi, D-Calif., agreed to drop increases in food stamp and unemployment benefits during a 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.
People would have to have earned at least $3,000 in 2007 to receive the rebates, the officials said.
Pelosi, answering questions from reporters today after addressing Families USA at a Washington hotel, said, “I am not confirming anything,” but added she would have something to say later.
Another element of the plan is a package of tax breaks for businesses that could cost as much as $70 billion, far more than had been expected, said a senior House aide and a Democratic lobbyist.
The business tax portion would give businesses incentives to invest in plants and equipment, give small businesses more generous expensing rules and allow businesses suffering losses now to reclaim taxes previously paid.
After a key Wednesday night meeting in which the parameters of an agreement were reached, Pelosi and Boehner spoke again today to cement the accord.
In the talks, Pelosi pressed to make sure tax relief would find its way into the hands of lower-income earners while Boehner pushed to include upper middle-class couples, according to congressional aides.
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.
Published in The Messenger 1.24.08