Trying to stimulate the economy: Congress works on tax refunds, business incentives.
A slowing of economic growth in the U.S. and volatility in stock markets worldwide was cause for Congress and President Bush to call for a package of tax incentives to stimulate consumer spending and business investment. The mantra became the three Ts--timely, targeted and temporary. Several economists-Federal Reserve Chairman Ben Bernanke among them--said economic stimulus measures should take effect this spring, should be designed to encourage consumer and business spending and should be short term.
Treasury Secretary Henry Paulson, House Speaker Nancy Pelosi (D-CA) and House Minority Leader John Boehner (R-OH) agreed on a fairly simple stimulus package, which the House passed--quickly--with an overwhelming 385 to 35 vote.
Then it was the Senate's turn. Apparently somewhat miffed that their leadership had not been included in negotiations between the House and the administration, senators decided to write their own stimulus bill.
According to Senate Majority Leader Harry Reid (D-NV), 51 senators wanted a bigger package of incentives and at least 15 senators had specific items they wanted in the bill. House leaders and the Bush administration urged the Senate to keep it simple and act quickly. There was talk of a second stimulus bill that would have longer-term effects.
What the Bills Would Do
The House bill would give tax rebate checks to anyone who had earned income or tax liability in 2007 plus a bonus for each dependent child. Rebates would be phased out for high-income taxpayers.
For businesses, it would increase the small business expensing limit to $250,000 and raise the phaseout threshold to $800,000. It would allow a 50 percent bonus depreciation for new capital investments. Both provisions would be effective for 2008 only. In an effort to help the housing market, the bill would temporarily raise the timit on government sponsored or insured loans to $729,750.
The bilt approved by the Senate Finance Committee would retain most of the rebates approved in the House bill plus giving rebates to senior citizens on Social Security and veterans who receive disability benefits.
The Senate Finance bill, too, would increase small business expensing thresholds and provide a bonus depreciation for new capital investment. It would extend unemployment benefits, lengthen the net operating loss carryback period and extend expiring energy tax incentives, including those for consumers making residential improvements such as new windows, doors and furnaces. Other proposals included increased spending for infrastructure, food stamps, revenue bonds and low-income heating assistance.
Oh, yes, the cost. The House bill would cost the government $146 billion, the Senate bill $159 billion. The Congressional Budget Office warned that, when combined with possible additional funding for the Iraq and Afghanistan wars, the stimulus package could push the federal deficit to $400 billion.
Bush Signs Bill Expanding FMLA Benefits
President Bush signed a defense authorization bill that expands unpaid Family & Medical Leave Act (FMLA) leave to family members of military service personnel on active duty or in need of care after being wounded in combat. It covers family members of the National Guard and military reserve units as well as full-time military units. Family members would qualify for up to 12 weeks of FMLA leave and up to 26 weeks of FMLA leave to care for a combat-wounded service member.
It does not change the coverage threshold. The new provisions apply to employers with 50 or more employees. The law took effect as soon as it was signed.
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|Title Annotation:||Capitol Retail Report|
|Date:||Mar 1, 2008|
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