~$145B of free money incoming

[Xisiqomelir]

WaPo

Tentative Deal Reached on Economic Stimulus Package
Most Workers Would Receive at Least $300 Tax Rebate

Congressional leaders and the White House reached tentative agreement today on a roughly $145 billion economic stimulus package that would quickly send payments to the poor and middle class while offering businesses one-time incentives to invest in new equipment and write off tax losses.

The deal, reached after an arduous, late-night negotiation between House Speaker Nancy Pelosi (D-Calif.), House Minority Leader John A. Boehner (R-Ohio) and Treasury Secretary Henry M. Paulson Jr., was a work of difficult compromise. Democrats acceded to Republican demands, jettisoning plans to extend unemployment benefits and food stamps for now but concluding that they could revisit the issue if the economy continues to slide.

Republicans agreed to offer rebates as large as $1,000, even to working families that earn too little to pay income tax [ME: DOUBLE U TEE EFF], an idea they had roundly rejected in past stimulus plans.

"When all the numbers are tallied, this will be the most progressive economic package we have seen in years," said a senior House Democrat.

Boehner authored provisions that would allow faster tax write-offs for corporate investment and immediate tax deductions for small-business investments in plants and equipment. Businesses also would be able to take tax deductions this year on operating losses from as long as five years ago.

Under the deal, nearly everyone earning a paycheck would receive at least $300 from the Internal Revenue Service. Most workers would receive rebates of $600 each, or $1,200 per couple. Families with children would receive an additional payment of $300 per child. Workers who earned at least $3,000 last year -- but not enough to pay income taxes -- would be eligible for $300.

Rebates would be limited to single taxpayers who earned up to $75,000 or couples with incomes of as much as $150,000.

Pelosi dropped some key demands to keep the tilt of the package toward the middle class and to include the working poor. In addition to the unemployment and food stamp benefit extensions, she set aside proposed funding increases for low-income heating assistance and aid to state and local governments in the form of either Medicaid assistance or infrastructure funding.

Those concessions prompted some protest from House Ways and Means Committee Chairman Charles E. Rangel (D-N.Y.), who huddled with Pelosi deep into the night hashing over the details. Senior Democratic aides said they needed more committee chairmen and rank-and-file members to sign off on the plan before they can unveil what they are calling a tentative agreement.

House Democrats assured members the package still must go through the Senate, where Democrats could add additional provisions. With unemployment still at a relatively low 5 percent, the demand for unemployment insurance extensions has not reached a politically fevered pitch. But it still may, they said.

"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.) said this morning. He announced that his committee would draft its own stimulus bill next week.

To address the underlying economic issue of the housing slump, administration officials agreed to expand the Federal Housing Administration's ability to insure higher-priced mortgages and to help homeowners threatened by foreclosure renegotiate their loans without sharp increases in their payments.

The package would temporarily increase the size of jumbo mortgages that can be bought by government-sponsored Fannie Mae and Freddie Mac, from $417,000 to as much as $700,000 in high-cost housing markets.

I guess "fiscal responsibility" has become a joke phrase. I look forward to the public taking more of this borrowed money the Treasury doesn't have and "stimulating the domestic economy" by buying Japanese/Korean HDTVs.

[Havok]

As long as I can spend it, I don't care where it comes from or who has it. $600 will make 2 bike payments for me and that is fine and dandy.

[Uraniun235]

I look forward to the public taking more of this borrowed money the Treasury doesn't have and "stimulating the domestic economy" by buying Japanese/Korean HDTVs.

Do we even make anything any more? I mean almost anything electronic is going to come from abroad, and it's not like Joe Consumer has a pressing need for lumber or steel, and it's not like he'd go on a spending binge on corn and wheat.

What about appliances? Are any of those still made stateside?

[Xisiqomelir]

As long as I can spend it, I don't care where it comes from or who has it. $600 will make 2 bike payments for me and that is fine and dandy.

Yours is going to come from Stravo, and mine is going to come from thekernel. Thanks guys!

Do we even make anything any more? I mean almost anything electronic is going to come from abroad, and it's not like Joe Consumer has a pressing need for lumber or steel, and it's not like he'd go on a spending binge on corn and wheat.

What about appliances? Are any of those still made stateside?

I have a Westinghouse monitor...but I'm pretty sure it was made in China.

[Havok]

Thanks Stravo!!

I look forward to the public taking more of this borrowed money the Treasury doesn't have and "stimulating the domestic economy" by buying Japanese/Korean HDTVs.

Do we even make anything any more? I mean almost anything electronic is going to come from abroad, and it's not like Joe Consumer has a pressing need for lumber or steel, and it's not like he'd go on a spending binge on corn and wheat.

What about appliances? Are any of those still made stateside?

Even if we do "make" anything, at least some, if not the majority, of the parts are manufactured over seas.

[Gerald Tarrant]

Republicans agreed to offer rebates as large as $1,000, even to working families that earn too little to pay income tax [ME: DOUBLE U TEE EFF], an idea they had roundly rejected in past stimulus plans.

The poor are the ones who are most likely to have income problems during a recession. They are also the ones most likely to spend the money immediatly. And below a certain income level the only taxes an individual pays are the Social Security contributions. Which are ~4% on the first 90k (I think, although if you include the business contribution to social security it may be 9%).

Pelosi dropped some key demands to keep the tilt of the package toward the middle class and to include the working poor. In addition to the unemployment and food stamp benefit extensions, she set aside proposed funding increases for low-income heating assistance and aid to state and local governments in the form of either Medicaid assistance or infrastructure funding.

That's too bad, extending the value of food stamps and unemployment benefits would probably have been more effective, and faster than any other package they work out. The state medicad packages also would have probably seen less waste and more haste than any federal program. Hopefully those proposals and the heating aid get passed as seperate bills, since they are the most likely candidates out of the fiscal packages to do anything.

To address the underlying economic issue of the housing slump, administration officials agreed to expand the Federal Housing Administration's ability to insure higher-priced mortgages and to help homeowners threatened by foreclosure renegotiate their loans without sharp increases in their payments.

The package would temporarily increase the size of jumbo mortgages that can be bought by government-sponsored Fannie Mae and Freddie Mac, from $417,000 to as much as $700,000 in high-cost housing markets.

Holy crap, I don't feel much sympathy for the folks in that "$417,000 to as much as $700,000" range. This part of it is just making uncle sam responsible for more bad loans. Do they really want to prolong the pain?

[Setesh]

I'm slightly dubious, this sounds a lot like the 'tax rebate' Bush had put through in his first term. The one that 85% of those who took it ended up paying back on the next years taxes.

[aerius]

Do we even make anything any more? I mean almost anything electronic is going to come from abroad, and it's not like Joe Consumer has a pressing need for lumber or steel, and it's not like he'd go on a spending binge on corn and wheat.

Sure, but it's been pretty much reduced to a niche market these days, Cary Audio for instance has a nice line of A/V gear but it's going to cost you a shitload of cash. There's lots of other such small companies making all kinds of everyday electronics in the US, but as with Cary, it's gonna cost you, big time.

[lance]

I look forward to the public taking more of this borrowed money the Treasury doesn't have and "stimulating the domestic economy" by buying Japanese/Korean HDTVs.

Do we even make anything any more? I mean almost anything electronic is going to come from abroad, and it's not like Joe Consumer has a pressing need for lumber or steel, and it's not like he'd go on a spending binge on corn and wheat.

I know a freind of mine is getting a job assembling cabinets so My guess would be that things made of wood, and food.

[Stravo]

Please don't get me started on how shitty a situation it is when people who aren't even fucking PAYING taxes are getting money back and I get dick because I make over some arbitrary number that really isn't that much when you factor in the high cost of living in NYC. Fuck this rebate. Since when did making over $75,000 take me out of the Middle class? I guess I don't get to stimulate the economy.

[Gerald Tarrant]

White House Fact Sheet for the stimulus package

Fact Sheet: New Growth Package Meets Criteria to Keep Our Economy Healthy [/size]

President Bush Discusses the Bipartisan Economic Growth Agreement


Today, President Bush announced his Administration reached a bipartisan agreement with House leadership on an economic growth package, and he encouraged Congress to deliver a bill to his desk as soon as possible to bolster the economy this year. The President's advisors and many outside experts expect that our economy will continue to grow over the coming year, but at a slower rate than we have enjoyed for the past few years – and there is the risk of a downturn. The agreement reached today meets the criteria the President set forward last week to provide an effective, robust, and temporary set of incentives to protect the health of our economy and encourage job creation. If enacted in a timely manner, it is expected to help create more than half a million jobs by the end of 2008.

The Growth Package Includes Measures To Bolster Both Business Investment And Consumer Spending, Which Are Critical To Economic Growth

1. The agreement reached today would allow Americans to keep more of their money to stimulate consumer spending. The growth plan provides approximately $100 billion in temporary relief that will allow Americans to keep or spend more of their incomes. Under the agreement:

In 2008, taxes would be cut from 10 percent to zero percent on the first $6,000 dollars of taxable income for individual taxpayers and the first $12,000 of taxable income for couples. Taxpayers could receive rebates of up to $600 for individuals and $1,200 for couples. A minimum of $300 per person and $600 per couple would be available to those with at least $3,000 of earned income. This relief would be available to everyone with adjusted gross income less than $75,000 for singles and $150,000 for married couples filing jointly. It will be phased out for taxpayers above those income thresholds.

Everyone eligible for this relief would also receive an additional $300 per child. For example, this would mean up to $1,800 of tax relief for an eligible couple with two children.

2. The agreement would also offer incentives to spur business investment. The agreement would save businesses approximately $50 billion in near-term taxes through a temporary change to the tax code that will allow American businesses that buy new equipment this year to deduct an additional 50 percent of the cost of their investment in 2008. This will encourage businesses to expand and create new jobs now because buying equipment, software, and tangible property this year will dramatically lower their taxes. The agreement also increases expensing for small businesses.

The Agreement Reached Today Adheres To Principles President Bush Set Forward Last Week To Guide Deliberations

The growth package:

Is big enough to make a difference in an economy as large and dynamic as ours. The package is approximately $150 billion, an amount sufficient to provide a boost to the economy.

Is built on broad-based tax relief that will directly affect economic growth, not Federal spending that would have little immediate impact on our economy. The package is not a collection of spending programs – it does not include any government outlays beyond the minimum rebate check and refundable child tax credit.

Is temporary and will take effect right away so we can get help to our economy when it is needed most. The personal tax relief will begin to stimulate consumer spending and additional economic growth within about 60 days of enactment, when the first rebate checks are expected to go out.

Does not raise taxes or include wasteful spending provisions.
The Growth Package Announced Today Would Use Proven Methods To Keep Our Economy Healthy

The experience of the 2001 and 2003 tax cuts shows that providing tax relief to families stimulates the broader economy by boosting household spending. For example, rebate checks increased total consumption by about 0.8 percent in the quarter that the 2001 rebates were received and about 0.6 percent in the subsequent quarter. As the non-partisan Congressional Budget Office noted, "Most analysts agree that the 2001 rebate stimulated the economy."

The approximately $100 billion of individual tax relief included in the growth package represents a substantially larger amount than the tax rebates of 2001. In 2001, $38 billion was distributed in rebate checks, amounting to 0.4 percent of GDP. $100 billion amounts to 0.7 percent of current GDP.

Please don't get me started on how shitty a situation it is when people who aren't even fucking PAYING taxes are getting money back and I get dick because I make over some arbitrary number that really isn't that much when you factor in the high cost of living in NYC. Fuck this rebate. Since when did making over $75,000 take me out of the Middle class? I guess I don't get to stimulate the economy.

75k+ plus is the top ~1/4 of US income distribution.

[Setesh]

Please don't get me started on how shitty a situation it is when people who aren't even fucking PAYING taxes are getting money back and I get dick because I make over some arbitrary number that really isn't that much when you factor in the high cost of living in NYC. Fuck this rebate. Since when did making over $75,000 take me out of the Middle class? I guess I don't get to stimulate the economy.

It does say working poor, so at least they have jobs. To qualify for the no tax clause you have to be making less than subsistence living. That means way under the poverty line, we're talking $6-9000 a year.

[Stravo]

Please don't get me started on how shitty a situation it is when people who aren't even fucking PAYING taxes are getting money back and I get dick because I make over some arbitrary number that really isn't that much when you factor in the high cost of living in NYC. Fuck this rebate. Since when did making over $75,000 take me out of the Middle class? I guess I don't get to stimulate the economy.

It does say working poor, so at least they have jobs. To qualify for the no tax clause you have to be making less than subsistence living. That means way under the poverty line, we're talking $6-9000 a year.

I don't begrudge them their money, lord knows they need it but I think everyone deserves some cash even if its capped at say $200. It doesn't sound like much but $200 out of the blue unexpected is a neat little bit of cash you can use to treat your gal out to a night on the town or buy something or pay off a bill. It's something.

When you're filing taxes and just about every damned deduction has that fucking cut off that stops you from taking advantage it gets annoying. For example, Why do I not get to deduct my student loan interest payments. I may make more but I'm paying way more than the next guy in interest.

I get that I'm in a top percentage bracket but trust me, living in NYC it certainly doesn't feel that way. As my boss keeps egging on - Tax time - it's enough to make you Republican, isn't it?

[Broomstick]

I guess "fiscal responsibility" has become a joke phrase. I look forward to the public taking more of this borrowed money the Treasury doesn't have and "stimulating the domestic economy" by buying Japanese/Korean HDTVs.

I agree, the Feds are planning to spend money that doesn't exist and there are probably better ways to poke at the current economic mess.

If it makes you feel better, though, I'll probably spend mine on rent, food, perhaps some new clothes for the job interviews I hope to have, and - oh, extravagance! - enough gas for me to go visit my parents.

That's too bad, extending the value of food stamps and unemployment benefits would probably have been more effective, and faster than any other package they work out.

Personally, I'd rather have a JOB than extended unemployment benefits. I'm hoping to get a new job before I qualify for food stamps.

[LadyTevar]

I'm slightly dubious, this sounds a lot like the 'tax rebate' Bush had put through in his first term. The one that 85% of those who took it ended up paying back on the next years taxes.

Oh yes... that one.
I got all of $11 back.

[MKSheppard]

Since when did making over $75,000 take me out of the Middle class? I guess I don't get to stimulate the economy.

But you're a rich person! oneoneeoneoeoeneoneone! No tax cuts for the rich! *sticks tounge out*

[Falkenhorst]

Do we even make anything any more?

http://www.scotforge.com/sf_about.htm

[Master of Ossus]

I don't begrudge them their money, lord knows they need it but I think everyone deserves some cash even if its capped at say $200. It doesn't sound like much but $200 out of the blue unexpected is a neat little bit of cash you can use to treat your gal out to a night on the town or buy something or pay off a bill. It's something.

When you're filing taxes and just about every damned deduction has that fucking cut off that stops you from taking advantage it gets annoying. For example, Why do I not get to deduct my student loan interest payments. I may make more but I'm paying way more than the next guy in interest.

I get that I'm in a top percentage bracket but trust me, living in NYC it certainly doesn't feel that way. As my boss keeps egging on - Tax time - it's enough to make you Republican, isn't it?

And don't forget that when our kids get to college, if things stand as they are now then we'll have to pay essentially the full amount so our kids can get an education, whereas someone making an arbitrarily smaller amount of money will qualify for HUGE grants in terms of financial aid (at Pomona, for instance, people with families making under $70k/year typically pay NOTHING, but if you make over $100k you pay $45k).

[Zablorg]

So who's going to spend it on 100 cups of coffee?

[Natorgator]

So who's going to spend it on 100 cups of coffee?

I think the stimulus is kind of stupid because it doesn't extend unemployment benefits, which to me would make the most sense. I'm wondering how we are going to pay for it, but I guess that's never really mattered. In any case, I'll take a free 600 bucks no problem.

[K. A. Pital]

Heh. I always share a good smile with fellows when I read the words "healthy American economy" - it's rather unhealthy, especially at the moment, so you can't "keep healthy" something that isn't healthy already.

[Durandal]

This idiotic idea reminds me of the scene from South Park where Stan's parents catch Michael Jackson (Mr. Jefferson) sleeping with all the children. Stan's dad immediately objects and says, "This is highly inappropriate!" Then Mr. Jefferson says, "Don't be mad! Here, I want you both to have $100." Then Stan's dad says, "I'm going to buy that new sport coat I've been wanting!"

This little rebate is a gimmick and frankly, it's two steps removed from bribery. Gee, it's an election season, and Congress is literally throwing money at people to "stimulate the economy". Thus, anyone who doesn't vote for this pipe dream stimulus idea is at an immediate disadvantage. "Congressman so-and-so didn't want to give you $600 of your money back! Who does he think he is, holding on to your money?"

Please don't get me started on how shitty a situation it is when people who aren't even fucking PAYING taxes are getting money back and I get dick because I make over some arbitrary number that really isn't that much when you factor in the high cost of living in NYC. Fuck this rebate. Since when did making over $75,000 take me out of the Middle class? I guess I don't get to stimulate the economy.

I don't know how much you make, but from what I've read, the $75,000 cut-off begins a tapering of the refund. But you're absolutely right with respect to living expenses. It's insane that someone living in, say, Bumbfuck, Nowhere who makes as much as I do would be entitled to the same "stimulus", considering that his expenses are almost certainly half of mine, at most.

This stimulus is extremely short term. People are starting to default on loans they took out with no hope of paying back. So we're giving those people, what, another month before they default on their loans? $600 isn't going to help the people who got these loans, and it's not going to help the banks that gave them out.

Now, in a period where people with any financial sense should be saving money or investing it more safely, we're asking them to spend more money. And we're bailing out the banks who made these shitty decisions in the first place. But these banks pretty much factor government bail-outs into their risk assessments these days, so they make stupid loans like this. The people who are going to go out and blow this $600 are the ones who are in the hole right now, because they don't know how to make financially sound decisions. We got into this mess through spending money we didn't have and borrowing money. Now, we're going to get out by ... spending money we don't have and borrowing more money?

[Sea Skimmer]

Economic ‘plans’ like this remind me of how after independence many African nations kept printing presses in France or Belgium (depending on colonial ruler) so that some randomly government couldn’t simply print money in response to a crisis. 140 billion in tax rebates is going to amount to nothing but a pointless deficit addition. If we wanted we could spend all that money on infrastructure projects that would generate at least some economic activity, the US power grid needs some huge upgrades for starters, but no, that would require planning.

[Zablorg]

Have there been any intentions announced by the future presidential candidates to do something about their economy?

[Civil War Man]

We got into this mess through spending money we didn't have and borrowing money. Now, we're going to get out by ... spending money we don't have and borrowing more money?

To add another Futurama reference, we'll save ourselves from the giant ball of garbage hurtling towards Earth by shooting it with an equally large ball of garbage.