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23 April 2024

Deal near on US economic rescue package

By Agencies

Democratic and Republican leaders in the House of Representatives are looking for imminent agreement with the White House on an emergency package to jolt the US economy out of its slump after negotiators on all sides made significant concessions at a late-night bargaining session.

The leader of the House, Speaker Nancy Pelosi, agreed to drop increases in food stamp and unemployment benefits during the Wednesday meeting in exchange for gaining rebates of at least $300 (Dh1,095) for almost everyone earning a paycheck, including low-income earners who make too little to pay income taxes.

Families with children would receive an additional $300 per child, subject to an overall cap of perhaps $1,200 (Dh4,380), according to a senior House aide who outlined the deal on condition of anonymity in advance of formal adoption of the whole package. Rebates would go to people earning below a certain income cap, likely individuals earning $75,000 (Dh273,750) or less and couples with incomes of $150,000 (Dh547,500) or less.

Pelosi, a Democrat, and House Minority Leader John Boehner, a Republican, had yet to reach agreement on a package of tax breaks for businesses after estimates showed a tentative business tax agreement could exceed $70 billion (Dh255.5 billion), far more than had been expected, the aide and a Democratic lobbyist said.

Pelosi and Boehner appeared optimistic as they left their third extended negotiating session of the day with Treasury Secretary Henry Paulson. "We'll have more to say tomorrow," Boehner said. "We're hopeful."

However, Pelosi's spokesman said another negotiating session tentatively scheduled for Thursday was postponed because the speaker first needed to brief fellow Democrats on the emerging but plan.

Democratic aides said greater Republican flexibility over giving relief to poor families with children who would not have been eligible under President George W Bush's original tax rebate proposal was the catalyst that moved the talks forward.

Asked whether agreement was near, Pelosi said, "We're moving toward that, but all the issues are not resolved."

The business tax portion still being negotiated would give businesses incentives to invest in plants and equipment, give small businesses more generous expensing rules and allow businesses suffering losses now to reclaim taxes previously paid. The last item on spreading operating losses was proving to be unexpectedly expensive.

Pelosi pressed to make sure tax relief would find its way into the hands of lower-income earners while Boehner pushed to include upper middle-class couples with incomes of up to $130,000 (Dh474,500) or so, according to congressional aides.

Bush backs larger rebates of $800-$1,600 (Dh2,920-Dh5,840), but his plan would have left out 30 million working households who earn paychecks but do not make enough to pay income tax, according to calculations by the Urban Institute-Brookings Institution Tax Policy Center. An additional 19 million households would have received only partial rebates under Bush's initial proposal. (AP)