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Tax rebates OK’d for millions

The Associated Press

The Associated Press

WASHINGTON – Congressional leaders announced a deal with the White House on Thursday on a package that would give most tax filers refunds of $600 to $1,200, more if they have children.

House Speaker Nancy Pelosi said Congress would act on the agreement “at the earliest date so that those rebate checks can be in the mail.”

President Bush said the agreement “has the right set of policies and is the right size.”

The rebates would go to about 116 million families.

Individuals who pay income taxes would get up to $600, working couples $1,200 and an additional $300 per child. Workers who make at least $3,000 but don’t pay taxes would get $300 rebates.

The first rebate payments could begin going out in May and most people could have them by July, Treasury Secretary Henry Paulson said.

The package would allow businesses to immediately write off 50 percent of purchases of capital equipment and permit small businesses to write off additional purchases.

Pelosi, D-Calif., agreed to drop increases in food stamp and unemployment benefits in exchange for gaining the rebates of at least $300 for almost everyone earning a paycheck.

House Republican leader John Boehner of Ohio said the agreement “was not easy.”

“I hope that this agreement will show the American people that we will serve to move along other bipartisan agreements that we can have in the future,” he said.

Majority Leader Harry Reid said the goal is to send the package to the White House by Feb. 15, but he noted the Senate would likely try to add more spending. To address the mortgage crisis, the package raises the limit on Federal Housing Administration loans from $362,790 to as high as $729,750, allowing subprime mortgage holders to refinance into federally insured loans.

• Checks of at least $300 for almost everyone earning a paycheck. The full rebate would be limited to individuals earning $75,000 or less and couples with incomes of $150,000 or less.

• Spur business investments with so-called bonus depreciation and more generous expensing rules.

• Allow more subprime mortgage holders to refinance into federally insured loans.

The Associated Press

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