Congress Passes the Economic Stimulus Plan!

On Thursday, the Senate ended its Congressional impasse over the Economic Stimulus bill by making small amendments to the bill the House had passed the previous week. The bill was sent to the House, where it was quickly passed, and then sent to the President for signature. President Bush is expected to sign the bill next week. 

Congress, faced with the possibility of a recession, knew that some version of the bill would have to be passed in a timely manner to avoid American voters taking out their resentment at the polls.

The plan will send rebates from $600 for Single filers to $1,200 for Married Filing Joint filers. It will also send $300 checks to disabled veterans, the elderly and others with low incomes. Rebate checks in the full amount will go to single filers making up to $75,000 a year and couples earning up to $150,000. The rebates will be phased out for earners above those income limits. Those who earned at least $3,000 and paid no income tax for 2007 would get $300. This group includes those who received Social Security or veterans' disability benefits. The measure will also include some steps to aid the failing housing market.

The package will temporarily raise the dollar amount of mortgages that government-sponsored mortgage companies Fannie Mae and Freddie Mac can purchase and market as securities from $417,000 to as high as $729,750 in more expensive parts of the country. A similar plan will be put into effect for the FHA. These measures will allow more homeowners to refinance at lower rates.

The House overwhelmingly passed the Senate version only hours after it was received. The $168 billion set aside for the plan is meant for taxpayers and businesses to spend to revive the economy.

The Senate had debated the bill for over a week. Democrats had originally wanted the package to include an extension of unemployment benefits, energy relief for low-income earners and tax breaks for home builders and energy suppliers.

Republicans agreed with the Democrats on including disabled veterans, seniors and low-income earners who would have been left out of the House package. They were adamantly against additional unemployment benefits and the rebates for businesses. Democrats were successful in raising the amounts for the rebates. The House plan originally called for $300 for single filers and $600 for couples.

Bush described the final package as "robust, broad-based, timely, and it will be effective." He added that the compromise was "an example of bipartisan cooperation at a time when the American people most expect it."

Americans may receive their rebates as early as May. The rebates will be based on 2007 tax returns.

House Speaker Nancy Pelosi, D-California, stated "We believe the stimulus, the way it is targeted, will put money into the hands of those who will spend it immediately, injecting demand into the economy and therefore creating jobs."

For those who were not required to file a tax return for 2007, it is advisable to file one anyway to make sure you are on the IRS’s list for receiving a rebate!

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