Recovery Rebates and Economic Stimulus for the American People Act of 2008

RECOVERY REBATES AND ECONOMIC STIMULUS FOR THE AMERICAN PEOPLE ACT OF 2008 -- (Extensions of Remarks - February 06, 2008)

SPEECH OF
HON. AL GREEN
OF TEXAS
IN THE HOUSE OF REPRESENTATIVES
TUESDAY, JANUARY 29, 2008

* Mr. AL GREEN of Texas. Madam Speaker, today, Congress passed a $146 billion, bipartisan economic stimulus bill that will quickly send hundreds of dollars to poor and middle-class working families while offering businesses one-time incentives to invest in new equipment. Although there is much more to do if we are to meet the needs of American families, including extending unemployment benefits and food stamps, I believe that this stimulus is an important first step in our effort to help hardworking Americans.

* This broad-based stimulus package will provide tax relief of up to $600 per individual and $1,200 per married couple, plus an additional $300 per child. Recovery rebate checks could be sent as early as mid-May, getting money to Americans who will spend it immediately to reinvigorate the economy. In Texas alone, approximately 8.6 million families will receive rebates averaging over $900. Nationwide, over 111 million families would receive these rebate checks, including 35 million with earnings too low to pay income taxes. More than 19 million of these are families with children and 13 million are struggling seniors. Nearly $50 billion of the rebate will go to middle-income Americans and those aspiring to it. Economists estimate that each dollar of broad tax cuts leads to $1.26 in economic growth.

* The economic stimulus bill also helps address the crisis we are facing in our home mortgage market by permitting more borrowers facing defaults to refinance through the Federal Housing Administration (FHA). For 2008, the bill increases the FHA loan limits up to $729,750 from $362,790 to expand affordable mortgage loan opportunities for families at risk of foreclosure. In addition, the bill also enhances credit availability in the mortgage market by including a 1-year increase in the conforming loan limits for single family homes from Fannie Mae and Freddie Mac from $417,000 up to $729,750 for 2008. These increases in loan limits will benefit areas where housing costs are higher than the national average.

* Mortgage rates on loans that currently exceed these loan limits are much more expensive than for smaller loans. These higher rates have hurt demand for housing in high-cost areas. The provisions in the stimulus will lower borrowing costs for many Americans, including middle-class families in high-cost cities to those who may be facing foreclosure. More importantly, this will allow more homeowners to refinance their existing mortgages, thereby increasing the effectiveness of the interest freeze for some subprime borrowers brokered by the Treasury in December. This is because more borrowers will be able to take advantage of the freeze to refinance into new FHA loans.

* Finally, this bill will promote small business investment in equipment, which will spur job creation here at home. The bipartisan plan doubles the amount small businesses can immediately write off their taxes for capital investments made in 2008 from $125,000 to $250,000, for purchases of new equipment of up to $800,000 (from $500,000). It also provides immediate tax relief for all businesses to invest in new plants and equipment by speeding up depreciation provisions, so that firms can write off an additional 50 percent for investments purchased in 2008.

* While more needs to be done, I am confident that this bipartisan economic stimulus package will help many American families in the weeks and months ahead.

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