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Deal reached on US economic plan | |
(about 8 hours later) | |
The White House and Democrats in Congress have reached a deal on an economic stimulus package that will offer tax rebates to boost growth. | |
Although no exact details have yet been announced, White House press secretary Dana Perino confirmed that a bipartisan agreement had been reached. | |
The package could total $150bn (£76m), with rebates of up $600 for individuals and more for those with children. | |
Washington is moving fast to try to avoid the US falling into a recession. | |
Both parties have agreed to move much faster than normal to put forward plans for an economic stimulus, in light of the rapidly growing difficulties in the US economy. | |
And they plan to speed its passage through Congress, by-passing the normal committees. | |
Property slump | |
The agreement comes two days after the Federal Reserve slashed US interest rates to 4.5% from 5.25%, its biggest cut in 25 years. | |
Economists say the package needs to be put into action as soon as possible, before it is too late to help the economy. | Economists say the package needs to be put into action as soon as possible, before it is too late to help the economy. |
House Republican leader John Boehner, House Speaker Nancy Pelosi and Treasury Secretary Henry Paulson met for more than five hours on Wednesday to forge the agreement. | |
They are hoping the plan, combined with Tuesday's sharp cut in interest rates by the US Federal Reserve, will help stop the economy slipping into recession. | They are hoping the plan, combined with Tuesday's sharp cut in interest rates by the US Federal Reserve, will help stop the economy slipping into recession. |
The US has been hit by a slump in the property market and a credit crisis caused by banks investing in assets backed by sub-prime mortgages. | The US has been hit by a slump in the property market and a credit crisis caused by banks investing in assets backed by sub-prime mortgages. |
Some politicians are worried about the damage the plan will do to government finances. | Some politicians are worried about the damage the plan will do to government finances. |
It could potentially double last year's budget deficit of $163bn. | It could potentially double last year's budget deficit of $163bn. |
"I am concerned that in our rush to help, we talk ourselves into a quick, feel-good hit today that will leave us with a bigger budgetary hangover tomorrow," said Rep Paul Ryan of Wisconsin, senior Republican on the House Budget Committee. | "I am concerned that in our rush to help, we talk ourselves into a quick, feel-good hit today that will leave us with a bigger budgetary hangover tomorrow," said Rep Paul Ryan of Wisconsin, senior Republican on the House Budget Committee. |