Congresswoman Lois Capps raised the rapid accord reached between Democratic House leadership and President George W. Bush on an economic stimulus package, which is intended to slow the stock market’s downward slide and reduce fallout from sub-prime mortgage loan failures. Capps said the package would “quickly put money in the hands of low and middle-income Americans and encourage businesses to invest,” though she added that it did not have some components she favored including aid to the states, unemployment extensions, and more food stamps. Key elements of the $150 billion package include tax rebates of up to $600 per individual, targeted at those with incomes below $75,000 a year. For businesses, it confers a 50 percent bonus deduction for new equipment purchases and doubles the limit on expenses that small businesses can write off, to $250,000 annually.
Certain provisions will make it easier for homebuyers in more expensive markets to get new mortgages or refinance loans, according to a New York Times report. It will do so by allowing the government-sponsored mortgage finance companies Fannie Mae and Freddie Mac to buy loans of up to $625,000, instead of the current cap of $417,000; and allowing the Federal Housing Administration to insure home loans of up to $725,000, compared to $362,000 currently.
The House is expected to approve the package on February 6, after which it goes to the Senate, and it is anticipated that the President will sign it on February 15.