Congressional leaders reach tax accord

Congressional leaders reached a tentative deal on $150 billion worth of tax rebates that would provide $300 to $1,200 per household, according to published reports. House Speaker Nancy Pelosi, D-Calif., and House minority leader John Boehner, R-Ohio, reached agreement in principle in a telephone call this morning, the Associated Press reported. Ms. Pelosi reportedly agreed to drop increases in food stamp and unemployment benefits in exchange for rebates of at least $300 for most workers, including low-income workers who make at least $3,000, even if they make too little to pay income taxes. Under the tentative plan, families with children would receive an additional $300 per child up to $1,200 for couples with incomes of $150,000 or less and for individuals earning no more than $75,000 a year. The rebates would cost about $100 billion, according to congressional aides. Business could immediately write off 50% of purchases of plant and capital equipment under the tentative deal, and small businesses could write off additional purchases of equipment. The deal would also allow Fannie Mae and Freddie Mac to buy home mortgages much larger than the current $417,000 limit allows them to. The lending cap for the two government-sponsored enterprises that are the two biggest financers of U.S. home loans, could reach as high as $700,000 in areas with the highest home prices, according to House Financial Services Committee chairman Barney Frank, D-Mass. Senate Finance Committee chairman Max Baucus, D-Mont., has scheduled a meeting of that committee next week to discuss the stimulus package. Mr. Baucus and Finance Committee ranking minority member Charles Grassley, R-Iowa, have “agreed to work together, move quickly, and mark up economic stimulus legislation next week,” Mr. Baucus said.