Congress approves $216b plan to stimulate economy
Swift action clears way for Bush to put money in the hands of shoppers.
THE United States Congress has approved a US$152 billion (S$216 billion) economic stimulus plan to try and revive the world’s largest economy, which may be on the brink of a recession.
Moving swiftly to get the economic package to President George W. Bush, the House of Representatives passed the Bill by 380 votes to 34, just hours after the Senate cleared the measure on an 81 to 16 vote.
Mr Bush is expected to sign the Bill next week, which would put government money in the hands of American shoppers.
Given the deep divisions over Iraq, children’s health insurance, spending levels and other issues that at times brought Congressional action to a halt over the last year, the approval of the economic package was notably fast.
It came precisely two weeks after Mr Bush urged lawmakers to support the proposal. “This plan is robust, broad-based, timely and it will be effective,” he said in a statement on Thursday.
House Speaker Nancy Pelosi, at a rare joint news conference featuring all four leaders from Congress and Treasury Secretary Henry Paulson, declared: “We are making history. What has passed the Congress in record time is a gift to the middle class and those who aspire to it in our country.”
The Senate deal on Thursday capped a tense stand-off between Republican leaders, who had called for simply adopting the House plan, and Democrats, who had pushed their own, more expansive plan. Republicans blocked the Democrat move by a one-vote margin on Wednesday.
The final legislation was clearly broader than the original House-passed proposal backed by Mr Bush.
The Senate added the elderly and disabled veterans who had been left out of the House Bill. And to win more Republican support in the closely divided Senate, Democrats had to drop demands for benefits for long-term unemployed workers and other provisions that would have helped low-income earners pay heating bills and home builders write off current year losses against previous tax years.
The Senate also added language to help ensure that illegal immigrants did not receive tax rebate cheques.
From May this year, close to 111 million households in the country are likely to receive such cheques – US$600 for individuals, US$1,200 for couples plus an additional US$300 per child.
Individuals making up to US$75,000 a year and couples earning up to US$150,000 would get the full rebate, with those making more than that or too little to owe taxes getting smaller amounts.
The Bill also provides for business tax incentives. This includes US$250,000 in expenses that businesses can write off immediately.
The stimulus package will inject nearly US$152 billion into the economy this year and more than US$16 billion next year.
“This package of payments to individuals and incentives for businesses to invest will support our economy as we weather the housing downturn,” Mr Paulson said.
Even as Congress acted on the Bill, some lawmakers were discussing a possible second package to help the economy.
Senate Finance Committee Chairman Max Baucus, a Democrat, said Congress would move to adopt more stimulus legislation “if the economy continues to go south, if there are significant increases in foreclosures and bankruptcies and so forth”.
Senate Republican Leader Mitch McConnell said the economic package transcended politics. “This is not a victory for Republicans or Democrats. This is a victory for the American people,” he said.