The future looks a bit greener for cash strapped citizens and companies.
On Jan. 29, the U.S. House of Representatives — with a solid bipartisan majority — passed the Recovery Rebates and Economic Stimulus for the American People Act. The $146 billion package, now under Senate consideration, would provide tax rebates, business incentives, and mortgage relief to prop up a slowing economy, according to the Eight Congressional district.
If adopted, the act would give up to $600 to single taxpayers and up to $1,200 for married couples, plus $300 per child. The measure would double the capital investment write-off for small enterprises, encouraging new equipment acquisitions.
The proposal would also offer speedy depreciation provisions for businesses. This would enable firms to write off another 50 percent for current year purchased capital investments.
In addition, the initiative expands affordable mortgage opportunities for foreclosure risk facing families. The act includes a one-year single-family home loan limit increase from Fannie Mae and Freddie Mac, both federal mortgage programs.
Caley Gray — a Pascrell aide — said the economic stimulus act is a borrowed money action.
“Since the measure was designed as an emergency infusion of cash and capital into the economy, it is not paid for,” he said.
In a release, Rep. Bill Pascrell (D-8th) said the endeavor is geared towards revving up a downturning economy, thereby easing pain for others.
“Unfortunately, American families are not the only ones struggling to make ends meet. The recent economic downturn has taken its toll in our downtown areas too. This tax package encourages new capital investment by expanding small business tax write-offs. It creates new opportunities for small businesses to expand operations and hire new workers.”
The congressman said the proposal kicks off a new approach on Capitol Hill.
“The passage of this economic stimulus marks a meaningful shift in the way Congress will approach tax relief, and conduct its business in the upcoming year. Working across partisan barriers, House leaders negotiated an agreement with the White House that will boost the economy and relieve financial stress in households across America.”
Pascrell said he believes federal politicians’ proactive work on the economy must continue.
“As strongly as I support this package, I know even more can be done. Our economy still faces long term concerns that I will fight vigorously to address. For example, we need to extend unemployment insurance benefits, and broaden assistance programs for state governments.”
One financial professional offering insight into the act is Donald Radcliffe. He is a Manhattan based certified public accountant and Little Falls’ assistant to the mayor. He said he has “mixed feelings” about the mainly beneficial deal.
“I think it has more positives than negatives.”
Radcliffe said he believes the act would help monetarily challenged Americans. He said he thinks the proposal could ward off a recession.
Nonetheless, he said, Washington needs a sensible means to foot the nearly $150 billion tab. He said the cost should be offset with budget cuts. He said one problem is the Senate wants to tack on multi-billion dollar goodies, exacerbating an already bad federal budget deficit.
The CPA said the act’s mortgage loan and business investment writeoffs are useful economic stimulants. He said the Congress’ measure would encourage banks to step up lending, a key to spurring growth.
Radcliffe said there is no guarantee the personal tax rebates will generally end up being spent on purchases. He added a smart move for recipients would be to pay down income absorbing credit card debt.
Radcliffe said the money can help buoy people’s financial confidence, adding that advantage is important, since eroding faith decreases consumer activity, and increases recession likelihood.
“The biggest thing is people’s psyche. I think it’s more of a psychological thing, than a financial thing,” he said.
He said the package does not automatically cure the economy’s weaknesses. He noted two such factors are a sluggish real estate market, and weak dollar spurred oil price hikes.
Assemblyman Scott Rumana (R-40th) said he supports Washington’s economic invigoration efforts. He said the government has a chance to avoid harder fiscal times.
“In fact, if the country goes into recession, it will have a ripple effect down to the county and municipal government.”
Rumana said a check in the mail from Uncle Sam will ease many people’s money woes. He said struggling married couples will put a $1,200 handout to good use.
On another note, the assemblyman did echo’s Radcliffe’s concern about the U.S. Senate’s handling of the stimulus plan. “I’m not necessarily thrilled with the Senate trying to put more earmarks, and additional spending in their proposal.”
