The House Appropriations Committee has proposed an economic stimulus bill containing $275 billion in tax cuts and $550 billion worth of spending on renewable energy, infrastructure, education and other projects.
The American Recovery and Reinvestment Act promises to provide 95 percent of American workers with tax breaks. The Senate is working on its own version of the bill, and lawmakers are haggling over various provisions, but House Democratic leaders hope to bring the bill to a vote next week.
"This package is the first crucial step in a concerted effort to create and save 3 to 4 million jobs, jumpstart our economy, and begin the process of transforming it for the 21st century with $275 billion in economic recovery tax cuts and $550 billion in thoughtful and carefully targeted priority investments with unprecedented accountability measures built in," said Appropriations Committee Chairman David Obey, D-Wisc. (pictured) in a statement.
Individual tax provisions include a Making Work Pay tax credit of up to $500 per person or $1,000 per family, expansion of the Earned Income Tax Credit and an increase in the Child Tax Credit. The bill would provide a $2,500 education credit for the first four years of higher education expenses and an increase in income limitations. Forty percent of the credit would be partially refundable.
"This recovery package will provide tremendous tax relief, health care and job-training benefits for families struggling to make ends meet, while also giving businesses the boost they need to create new jobs," said House Ways and Means Committee Chairman Charles Rangel, D-N.Y.
Housing tax credits would remove the repayment requirement on the $7,500 first-time homebuyer credit for homes purchased after 2008 and before the termination of the credit on June 30, 2009.
For businesses, there would be a bonus depreciation provision, along with a five-year carryback of net operating losses. The carryback would exclude companies that have received benefits from the Treasury's financial bailout program, as well as Fannie Mae and Freddie Mac. Other provisions would extend the increase in small business expensing and expand the Work Opportunity Tax Credit for disadvantaged young people as well as unemployed, recently discharged veterans.
The bill would provide tax-exempt bonds and tax credit bonds to "recovery zones" that could be used for a wide array of purposes to stimulate economic development, including job training and education.
Energy tax incentives include a long-term extension of the renewable energy production tax credit, and a temporary election to claim the investment tax credit in lieu of the production tax credit. Provisions for small businesses would provide $430 million for new direct lending and loan guarantee authorities to make SBA loans more attractive to lenders and free up capital.
