The Senate and the House have passed an economic stimulus package that adds tax rebates for 20 million senior citizens and 250,000 disabled veterans to a package passed by the House last week.
Senate leaders agreed to drop provisions for extended unemployment benefits, home heating subsidies and tax refunds for coal producers. A version of the bill with those extra provisions was blocked by a filibuster on Wednesday. After Senate Democrats agreed to scale back the range of the package, the bill was approved by an 81-16 vote. House leaders then took up the measure and passed it by a 380-34 vote on Thursday night.
Like the House version, the Senate version provides tax rebates of $600 to individuals and $1,200 to couples, and an additional $300 per child for parents. Workers with at least $3,000 in income would qualify for $300 checks, as would those who receive at least $3,000 per year in Social Security benefits and veterans' disability payments. Rebates will be sent to individuals earning up to $75,000 per year in adjusted gross income and couples earning up to $150,000.
The bill also includes several business tax provisions, including one that allows businesses to expense more of their equipment and assets they purchase in 2008 instead of depreciating them, hiking the limit from $128,000 (as indexed for inflation) to $250,000 in 2008. It also increases the overall investment limit from $510,000 to $800,000. The bill allows a bonus depreciation of an extra 50 percent of the assets bought in 2008. The luxury auto cap on first year depreciation increases $8,000 for qualifying vehicles.
In addition the bill allows Fannie Mae and Freddie Mac to buy individual home loans worth up to $729,750, an increase from the current limit of $417,000. The Federal Housing Administration would also be able to insure loans of up to $729,750.
"I congratulate the Senate leaders for their quick action to pass a bipartisan economic growth package that is temporary, broad-based and will get money into our economy quickly," said Treasury Secretary Henry Paulson in a statement. "This package of payments to individuals and incentives for businesses to invest will support our economy as we weather the housing downturn."
He said the first checks would start going out in early May, with payments to be largely completed by this summer.
The bill now goes to President Bush, who is expected to sign the measure.
