House leaders announced Jan. 24 that they had reached a deal with the White House on a package to jump-start the nation's slowing economy. The estimated $150-billion package is primarily targeted to middle-income Americans but includes tax relief and incentives for businesses that could go into effect this spring. There is no additional federal infrastructure spending in the plan.
The initiative, the result of negotiations between the White House and Republican and Democratic House leaders, would double the amount small businesses can write off for new investments and make a temporary change to the tax code to allow businesses that buy equipment this year to deduct an additional 50% of the cost of their investment in 2008. The White House says the package would save businesses approximately $50 billion in near-term taxes and spur economic investment.
The package also provides up to $600 in tax relief for middle-income individuals and up to $1,200 for married couples, plus $300 per child for families with children.
"This agreement is a big win for the American people," said House Minority Leader John Boehner (R-Ohio). "It will stimulate our economy in the most direct and effective way possible by putting money in the hands of middle-income American families and by giving businesses incentives to create and build new jobs in our country."
House Speaker Nancy Pelosi (D-Calif.), said she was not "entirely pleased" with the package, but praised the bipartisan spirit that allowed the agreement to be reached quickly. She added that she would consider additional legislation in coming months "should the economy continue to worsen."
House leaders hope to bring the legislation to the floor as soon as possible. President Bush urged legislators to act quickly on the package. He said, "We have an opportunity to come together and take the swift, decisive action our economy urgently needs."