Details of Proposed Economic Stimulus Bill

by MB on January 24, 2008

Treasury Secretary Henry Paulson, House Minority Leader John Boehner, House Speaker Nancy Pelosi, Senate Majority Leader Harry Reid, and Senate Minority Leader Mitch McConnell
Photo: Susan Walsh, AP

UPDATE: The House and Senate have passed the final version of the Stimulus Bill. You can read the details in this post: Details on Final Stimulus Bill.

Congress and President Bush appear to have made a final agreement on the contents of the forthcoming economic stimulus bill.

Highlights:

  • Tax rebates of at least $300 to anyone earning a paycheck, including low income earners that pay little to no income tax.
  • Families with children would receive an additional $300 per child, capped at $1,200.
  • Rebates would also only go to families with incomes less than $150,000, and individuals earning less than $75,000.
  • New Business tax deductions including:
    • Advantageous changes in depreciation of assets.
    • Rule changes to allow small businesses to recovery previous taxes paid, if they are currently suffering losses.
  • And here’s the really big one to me: Allow Fannie Mae and Freddie Mac to purchase home mortgages greater than their current limit of $417,000. This limit would be increased up to $700,000 in areas with the highest home prices. This would be great news for those living in areas with very expensive real estate markets, as it should lower the cost of borrowing, and provide more liquidity.

Conclusion:

It looks like both sides compromised on this deal. The Democrats wanted to extend food stamps and unemployment benefits, while the Republicans did not want rebate checks going to individuals and families that didn’t pay income tax in the first place.

Personally, I’m very concerned about the costs. My understanding is that the budget deficit for 2008 is estimated to be $250 billion before the stimulus package. This agreement, in its current form is estimated to cost $140 billion. That means the US will need to borrow $390 billion this year to fund its spending. Oh, and don’t get me started on the unfunded Social Security or Medicare liabilities.

While I’m not an economist, I have to wonder from a common sense point of view, if it makes since for an individual, or a government, to continue to borrow from tomorrow, to pay for today.

{ 9 comments… read them below or add one }

Justin January 29, 2008 at 7:11 pm

What about requiring the money to be spent for services in the US rather than goods? Goods may mean money going out of the US to other countries – services means the money stays here. Restaurants, auto repair, etc. Why are we bailing out businesses that “lose” money (are we talking real losses or paper losses due to buying Hummers and deducting the entire cost). So, I get to buy a Hummer, deduct the entire cost, lose money, get money from the government because my business looses money. Wow, isn’t this a country for the people and by the people? I want MY country back.

Cliff January 24, 2009 at 11:02 am

Dude,

Get yourself a spell-checker!

MB January 27, 2009 at 9:12 am

Fixed. Thanks.

Meghan, FL Democrat February 1, 2009 at 11:08 pm

This is NOT Obama’s Bill… this is toxic Pelsoi & Reid’s Bill & they are trying to stuff it down everyone else’s throat.

This is a spending bill! Do they think Americans are stupid. Have you read all 180 pages of this garbage. Only about 20% will even be processed in 2009 & then Obama says it is URGENT to pass this. What a Crock. To think I voted for this guy.

Rob February 6, 2009 at 9:22 am

not that I favored the unregulated bailouts to banks etc., under the Bush administration, but I also do not favor the unabashed expenses under this unbelievable bailout plan of this Congress. It will cost EACH of us (in 2009) upwards of $180,000…in 2025, it will cost my children and their children even more, with the then current value of the dollar.

I cannot seem to find any website that provides–in detail–about what our silly representatives are voting on. So the public is left in the dark yet again, except for the “dire” warnings of this president.

Some stimulus is needed, but not for all these spending programs…simplify and cut back. The American people did not vote for a new set of programs, but for a more orderly regulated expenditure system. Sorry, Obama did not receive a mandate–half the country disagreed with him…I did not vote for a Congress to take $20.00 out of my left pocket, only to return $0.50 into my right pocket.

CUT SPENDING!!!! (geesh…doesn’t anyone get it??)

kd smith February 8, 2009 at 9:06 am

Bad,bad,bad. These are suppose to be smart people, what they left their brains at he door to follow “our leader”? And who can up with this go boom date?? Yes Will Robinson we are in danger, the only question is from what?

Greg February 14, 2009 at 8:24 am

Let’s face it there is only one way to turn this around and it begins by voting ALL of the politicians out of office and putting some everyday working Americans in there (term limits), second a law requiring complete discl;osure on thier income, and passing a law that states the politicians shall be forced to abide by the same rules as every American including social security, medicade, retirement. How dare they set special programs for themselves at our expense and then pass laws to be enforced on us that they are exempt from.

RobertG February 14, 2009 at 4:31 pm

Why not just print the money ? It disappeared in the toxic mortgage crash , right ? But the gold that backed it didnt disappear, right ? So just print it !

JT March 6, 2009 at 2:17 pm

Meagan, Fl Demacrat,
Welcome to the repulican party.:)

RobertG,
We are not on a gold standard any longer.

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