"I can't say that I'm totally pleased with the package," she said. "But ... I do know that it will help stimulate the economy, and if it does not then there will be more to come."
ONE PERCENT OF GDP
The proposal could undergo some changes when it reaches the Senate, where its price tag could climb even higher than the current $150 billion, or about 1 percent of U.S. gross domestic product.
John Sweeney, president of the AFL-CIO labour federation said the deal was not enough. "It is up to the Senate to extend unemployment benefits and increase food stamps to get money into the hands of those who will spend it quickest and need it most," he said in a statement.
Senate Majority Leader Harry Reid said he hoped the plan could be sent to Bush's desk to be signed into law by mid-February.
But Reid held open the possibility of additions to the bill. "We're going to take another look at it when it comes here (to the Senate)," the Nevada Democrat said.
The plan also includes provisions aimed at shoring up the battered housing market by increasing the size of mortgages that can be insured by the Federal Housing Administration and temporarily boosting the size of "conforming mortgages" to nearly $730,000 that can be financed by housing giants Fannie Mae and Freddie Mac. This would help lower the interest rates on these high-cost loans.
The rebate plan would phase out for higher income people - individuals making more than $75,000 in adjusted gross income and married couples making more than $150,000. Paulson said that for every $1,000 over those income levels, the rebates would be reduced by 5 percent.
One issue of contention was whether the rebates would be distributed only to those who paid income taxes or whether low-income people who do not earn enough to owe taxes would also receive cash. Democrats had sought to ensure that the rebates would be given to these workers as well.
Under the package, workers who reported income of at least $3,000 last year and paid no income taxes would be eligible for a check of $300 for individuals and up to $600 for married couples. They would also be eligible for the child rebates.
The package includes incentives for businesses to make new equipment purchases and other investments. Businesses would be able to immediately deduct 50 percent of the costs. Small businesses would be able to immediately write off up to $250,000 in purchases.
