Key Statements: Economic Stimulus Package

January 24, 2008

The agreement announced today by Speaker Pelosi, Minority Leader Boehner and Secretary Paulson is an effort to cut through the rhetoric and deliver rebate checks to middle class American families, to provide tax relief to business to create more jobs and to raise the home loan limits for FHA and GSE’s. The plan is to try and move this package in the House of Representatives in the next two weeks and send it to the Senate for expeditious action thereafter.

The uncertain economic situation has brought about this bipartisan effort to try and quickly stimulate the American economy. While the House at this point is expected to move quickly without Committee action, Senate Finance Chair Max Baucus and Ranking Member Chuck Grassley have scheduled a mark-up of a Senate Finance version of a stimulus bill for next week. Majority Leader Reid has stated that while he commends the bi-partisan efforts of the House, the Senate does not agree fully with the direction laid out by the President and House Leadership. What will be interesting to follow will be how different in fact a Senate marked up bill (and the role of the Finance, Banking and perhaps other committees in shaping it) will look from the outline released today.

A number of statements were made today by political leaders and government officials about this stimulus proposal. Quinn Gillespie & Associates has compiled these statements below to make it easier for you to review what has been said about the plan.

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STATEMENT BY THE PRESIDENT ON THE BIPARTISAN ECONOMIC GROWTH AGREEMENT

2:31 P.M. EST

President Bush: This morning my administration reached an agreement with Speaker Pelosi and Minority Leader Boehner on an economic growth package. Mr. Secretary, thank you for handling negotiations. Appreciate your hard work.

This agreement was the result of intensive discussions, many phone calls, late-night meetings, and the kind of cooperation that some predicted was not possible here in Washington. It also required patience, determination, and good will on all sides. I thank the Speaker and I thank Leader Boehner for their hard work and for their leadership, and for showing the American people that we can come together to help our nation deal with difficult economic challenges.

I am pleased that this agreement meets the criterion that I set forth last week to provide an effective, robust, and temporary set of incentives that will boost our economy and encourage job creation. This package has the right set of policies and is the right size. The incentives in this package will lead to higher consumer spending and increased business investment this year. Importantly, this package recognizes that lowering taxes is a powerful and efficient way to help consumers and businesses. I have always believed that allowing people to keep more of their own money and to use it as they see fit is the best way to help our economy grow.

I'm also pleased that this agreement does not include any tax increases, as well as unnecessary spending projects that would have little immediate impact on our economy.

I know Americans are concerned about our economic future. Our economy is structurally sound, but it is dealing with short-term disruptions in the housing market and the impact of higher energy prices. These challenges are slowing growth. Yet Americans can also be confident about our long-term outlook. Our economy is strong, it is dynamic, and it is resilient. It has led the world for many decades, and with the right policies in place, including the extension of the tax cuts passed in 2001 and 2003 that have helped our economy, I firmly believe we're going to continue to lead the world.

Because the country needs this boost to the economy now, I urge the House and the Senate to enact this economic growth agreement into law as soon as possible. We have an opportunity to come together and take the swift, decisive action our economy urgently needs.

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BIPARTISAN ECONOMIC STIMULUS PACKAGE WILL JUMPSTART AMERICA’S SLOWING ECONOMY

Speaker Pelosi: Today, Congressional Democrats and Republicans and President Bush reached an agreement on a bipartisan stimulus package to immediately jumpstart the slowing economy.

Our goals were to provide working Americans who are struggling in these difficult economic times with timely, targeted and temporary relief and to quickly give our economy a shot in the arm. We have accomplished both goals.

The House will move quickly to approve this stimulus initiative that will provide broad-based help to the American people and effectively invigorate the economy. We hope the Senate will do the same.

Economists agree that any stimulus package must put money in the hands of those who will spend it quickly to stimulate the economy, and this bipartisan package does just that.

This stimulus package with broad-based benefits will:

Provide tax relief this spring of up to $600 for an individual and up to $1,200 for a married couple, plus $300 per child. A total of 117 million families will receive a check.
Include $28 billion in checks to 35 million working families who would not otherwise been helped. More than 19 million of these are families with children.
Double the amount small businesses can write off their taxes for new investments to get our economy moving again and provide immediate tax relief for all businesses to invest in new plants and equipment.

To address another critical issue affecting American homeowners, the package includes mortgage lending reforms—including a one-year increase in Fannie Mae’s and Freddie Mac’s conforming loan limits (from $417,000 to $625,500), and other changes that immediately help families facing foreclosure refinance their loans and get the housing counseling they may need.

This is a remarkable achievement – that required compromise from all sides. We put Americans’ interests first. We are confident that this package will help American families struggling to make ends meet in the slowing economy, in the face of rising prices for gas, home heating oil, groceries, and health care.

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Boehner Praises Agreement on Economic Growth Package

House Republican Leader John Boehner (R-OH) issued the following statement announcing an agreement in principle on an economic growth package with Speaker Nancy Pelosi (D-CA):

“For the last two weeks, Congress and the Bush Administration have worked together to craft an economic growth package that will get our economy moving again on behalf of middle-class families and small businesses. Today, Speaker Pelosi, Secretary Paulson, and I came to an agreement in principle to bring a bill to the House floor so it can get to President Bush just as soon as possible.

“This agreement is a win for the American people. It will help to stimulate our economy in the most direct and effective way possible: by putting money back in the pockets of middle class families, and by giving employers incentives to create new jobs and grow our economy. Equally as important, this agreement contains no unrelated spending or tax increases – a Republican condition of support from the outset of our negotiations.

“We cannot lose sight of the fact that this agreement is only a short-term measure to deal with the unsettled economic situation. It is just as important to put policies in place to strengthen our economic competiveness and create more American jobs in the long-term. First and foremost, we should block the largest tax increase in American history looming in 2010. We also must lower our corporate tax rate, which is among the highest in the developed world, and finally end the arcane alternative minimum tax. And Washington finally needs to control spending and reform entitlements so we don’t leave a legacy of debt for generations to come.

“Many Americans correctly believe that Washington is broken. This agreement is one small step towards fixing it, and I’d like to thank Speaker Pelosi, Secretary Paulson, and our entire Republican leadership team for their work on this measure.”

Summary of the Economic Growth Package Agreement in Principle

I. Tax Relief for American Families:

Rebate Checks: The economic growth package will include rebate checks in the sum of two separate calculations, with an overall phase-out for those with adjusted gross incomes above $75,000 for a single taxpayer and $150,000 for married couples. Rebate checks will include a base amount determined by the greater of two options: (a) Income tax paid in 2007, with a maximum of $600 for a single taxpayer and $1,200 for married couples; or (b) $300 for an individual and $600 for a married couple, provided the individual or couple earned income of at least $3,000 in 2007.

A children’s bonus also will be included in the rebate check calculation. Anyone qualifying for the base amount also receives an additional $300 per child, with no cap on the number of children.

II. Tax Relief for Employers:

Bonus Depreciation: The economic growth package will provide for a 50 percent bonus deduction on new equipment in the year it is placed in service, with certain exceptions for equipment with a “long life.” This temporary tax cut offers significant savings on new property with a depreciation period of 20 years or less. This will give employers – particularly small businesses – greater incentive to invest and create jobs for more Americans searching for work. The temporary bonus depreciation, coupled with expensing measures enacted in May 2003, resulted in a four percent increase in business spending in the first six months alone.

Section 179 Expensing this provision allows employers, including small businesses, to fully expense $250,000 in both new and used tangible property in the year it is purchased up to an overall investment limit of $750,000. This will provide a particularly strong incentive for small companies to invest in their businesses so they can continue to provide good-paying jobs for the American people.

Increase in Government Sponsored Enterprises (GSE)/Federal Housing Administration (FHA) Conforming Loan Limit: The conforming loan limits for both FHA and GSE (such as Fannie Mae and Freddie Mac) loans would be increased from $362,000 to $725,000 and from $417,000 to $625,000 respectively.

III. No Extraneous Spending/Tax Hikes

The agreement in principle includes no extraneous spending on unemployment insurance, transportation infrastructure, food stamps, and Medicaid. In a letter to Speaker Pelosi last week, Republican Leader Boehner and Republican Whip Roy Blunt (R-MO) asked that any extraneous spending and tax hikes be taken off the table. All have been dropped.

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BAUCUS INTENDS TO MOVE SEPARATE STIMULUS BILL IN SENATE FINANCE COMMITTEE NEXT WEEK

Finance Chairman wants fair rebate for all taxpayers, cites unemployment insurance, food stamps as priority ideas

Washington, DC – At a press conference this morning, Senate Finance Committee Chairman Max Baucus (D-Mont.) said that the Committee will mark up its own economic stimulus package, independent of House legislation, next week. Baucus praised the focus of a reported agreement between House leaders and the President on tax rebates for working Americans, but said he wants to ensure that all who pay Medicare and Social Security payroll taxes – as well as those who pay income taxes – receive a fair rebate. Baucus also said the Finance bill could include quick stimulus measures such as increases to unemployment insurance and food stamps. He released the following statement this afternoon:

“The Finance Committee will mark up its own stimulus bill next week, a different bill than the House will reportedly consider. The reported agreement between House leaders and the Administration seems to have some very good elements, particularly tax rebate for low-income wage earners. For my part, I want to make sure that every American who looks at his or her paycheck and sees Medicare taxes taken out, Social Security taxes taken out, gets the same rebate as every other taxpaying American.

I believe, and I think many Senators agree, that we can do even more to stimulate America’s economy. Extending unemployment insurance can get money out fast to people who need it and will spend it. Increasing food stamps could do the same. Additional business incentives may more directly help hurting businesses that need quick cash to spend.

I believe the Committee can complete its work by the time the House sends a bill to the Senate. I intend for the Committee to work fast, and to work together. I only announced this markup after speaking with Ranking Member Grassley. He and I will continue the tradition of Finance Committee bipartisanship, and we will work with the Treasury Secretary, with House leaders, and with the White House to agree on any new provisions.

Americans want Congress to pass economic stimulus fast, but they also want us to get it right. I am confident that Finance Committee action can help Congress consider an agreement than can quickly pass both chambers and be signed by the President. The Finance Committee will bring forward a package that is timely, targeted, and temporary, with smart solutions to help the American economy and all our citizens.”

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Hoyer Praises Bipartisan Stimulus Package

House Majority Leader Steny H. Hoyer (MD) released the following statement after the announcement that House Democrats and Republicans and the Bush Administration reached agreement on an economic stimulus package:

“This bipartisan economic stimulus package will provide an important shot in the arm to our struggling economy by putting money in the hands of hard-working Americans who will spend it quickly and help stimulate the economy.

“I am pleased that this stimulus package adhered to the principles that Democrats have stressed for weeks – that an economic stimulus be timely, targeted and temporary. It is critical that we not enact a stimulus plan that further erodes our nation’s long-term fiscal condition.

“Democrats are particularly pleased that, under this package, 35 million working families who would not otherwise have been helped will receive tax relief this spring, and that 117 million families in all will receive a stimulus check. We are disappointed, however, that our Republican colleagues ruled out including an extension of unemployment insurance benefits and increasing food stamps in this package – provisions that would provide an immediate bang for the buck and help stimulate our economy, according to economists on both sides of the aisle. We will continue to look at these and other provisions in the days ahead.

“It is my hope and expectation that the House will consider this stimulus package quickly. And, I hope the Senate will do likewise. It is imperative that this streamlined and focused stimulus package not be loaded down with extraneous provisions.”

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REID STATEMENT ON ECONOMIC STIMULUS DEAL STRUCK BY HOUSE, PRESIDENT

Senate Majority Leader Harry Reid made the following statement today in response to the agreement reached by Congress and the President on a bipartisan stimulus package to revive our faltering economy:

“I am pleased the Speaker and the House Minority Leader, working with Secretary Paulson, have reached an agreement to send stimulus checks for individuals and provide tax relief to businesses. And I am proud that Democratic negotiators were able to secure tax relief for millions of Americans who would have been completely left out of the President’s proposal.

“In an effort to get the bipartisan process moving in the Senate, Finance Committee Chairman Baucus and Ranking Member Grassley will conduct a markup of stimulus proposals next week. I expect that the Committee and other Senators will work to improve the House package by adding funds for other initiatives that can boost the economy immediately, such as unemployment benefits, nutrition assistance, state relief and infrastructure investment. I look forward to this proposal’s quick passage in the House so that the Senate can debate these provisions soon and meet my goal of sending the President a package by the President’s Day recess.”

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DODD LETTER TO REID

Senator Chris Dodd (D-CT), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, yesterday sent a letter to Majority Leader Reid recommending that any potential stimulus bill should include several provisions to help American homeowners avoid foreclosure, help local governments deal with foreclosed and abandoned properties, and modernize the Federal Housing Administration (FHA), among others.

January 22, 2008

The Honorable Harry Reid
Majority Leader
528 Hart Senate Office Building
Washington, DC 20510

Dear Mr. Leader:

The collapse of the housing market is a prime cause of the economic problems that we are facing today. As you know, housing prices are falling on a national basis for the first time since the Great Depression. Delinquencies are growing, and foreclosure rates are at historic highs and likely to grow further, affecting as many as 2 million families directly and millions more through depressed housing prices and reduced home equity. It is shrinking revenues of state and local governments, reducing their ability to deal with local challenges, and it is undermining the stability of neighborhoods. In light of these facts, I believe that any stimulus package must address the problems that confront the housing market, distressed homeowners and their communities. I also believe that a stimulus package should address some of the labor market problems caused by the massive layoffs and downturn in the housing market. One way to stimulate this vital sector of our economy is to invest in targeted infrastructure projects.

As Chairman of the Senate Banking Committee, I suggest that we include in a stimulus bill the following provisions that fall under the Committee’s jurisdiction:

Housing

Any housing solutions should include at least these elements: help existing homeowners avoid foreclosure; provide funds to local governments to get foreclosed and abandoned properties off the market; modernize the FHA; and raise the conforming loan limits on a temporary basis, consistent with the safe and sound operations of Freddie Mac and Fannie Mae.

Avoiding foreclosure: I am working on a proposal to create a Federal Homeownership Preservation Corporation to purchase outstanding mortgages at the steep discounts at which they are currently valued in the marketplace, ensuring that lenders and investors take a “haircut” and are not being bailed out. The discounts would then be passed on to homeowners in the form of new, lower-balance mortgages insured by FHA or backed by the housing government-sponsored enterprises (GSEs). Thus, the program would take advantage of the existing mortgage distribution system. The new mortgages would be 30-year fixed-rate mortgages, ensuring long-term stability for homeowners and housing markets. The difference between the old mortgage and the new mortgage would be sufficient, after initial capitalization, to fund the program and cover possible losses. I propose $10 billion to $20 billion for initial capitalization of this entity.
CDBG for Purchase and Rehabilitation of Foreclosed Properties: I respectfully request that the stimulus package include $10 billion for the CDBG program to allow local governments to buy foreclosed homes, rehabilitate them, resell them to homeowners, use them for rental housing, or demolish them and bank the land for future development, as local conditions require. CDBG is a formula program that can be distributed very quickly. Foreclosed and abandoned homes are decimating many communities around the country. They lead to a cycle of disinvestment, crime, falling property values and property tax collection, thereby leading to service cuts and further disinvestment. CDBG fund can help stop this devastating process.
FHA: The FHA Modernization Act should be included in the stimulus package. A revitalized FHA could provide many distressed borrowers with new sources of mortgage capital, helping many save their homes.
Conforming Loan Limits: Currently mortgage lending other than loans insured by FHA or sold to Fannie Mae or Freddie Mac has ground to a virtual halt. Even creditworthy borrowers cannot get financing, or must pay very high rates. Raising the conforming loan limits temporarily, and consistent with safety and soundness, would start to bring liquidity back to these segments of the market, helping to restore housing markets around the country.

Infrastructure

Inject Funds into Existing Transit Projects: As economist Lawrence Mishel from the Economic Policy Institute testified before the Joint Economic Committee in support of a stimulus proposal that included $40 billion in infrastructure spending: “Managed wisely, federal investment in infrastructure can be both well-targeted and timely.” An additional $2 billion invested into transit projects that are currently under construction or part of existing maintenance backlogs would create almost 100,000 jobs, according to the U.S. Chamber of Commerce. The funding would be targeted to those transit systems that could spend the money immediately, and those infrastructure projects (expediting new transit lines that are already under construction and building additional buses and rail cars) would employ workers in the two sectors hardest hit by the economic slowdown, manufacturing and construction. Finally, while the actual expenditures would be temporary and targeted, these projects would produce a lasting result that would increase future economic activity.

Thank you for your consideration of these proposals. I look forward to continuing to work with you and other colleagues to enact an effective stimulus package.

Sincerely

CHRISTOPHER J. DODD
Chairman

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McConnell on House Economic Growth Proposal

U.S. Senate Republican Leader Mitch McConnell released the following statement Thursday regarding bipartisan work on an economic growth package:

“The House reached an agreement on an economic growth package which neither raises taxes nor increases spending on government programs. We can all agree that we must act soon if we want to provide timely relief to American families and job creators, and boost our fundamentally strong economy.”

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PRESS BRIEFING BY TREASURY SECRETARY HENRY PAULSON ON THE BIPARTISAN ECONOMIC GROWTH AGREEMENT

2:34 P.M. EST

SECRETARY PAULSON: Let me just make a few comments, and then we'll take your questions. First of all, I very much thank the President for his leadership. Last Thursday, when we talked with the congressional leaders, he made the point that this is a compelling issue, it's of the utmost importance to the American people, and bipartisan cooperation is key, putting out principles, working with leaders that shared the same principles at the outset were able to come to an important agreement.

Now the work is far from over, and, as far as I'm concerned, on this package it's not going to be over until it's enacted, until we get the checks out to the American people. And, again, there's a lot that I have on my plate as we look at the capital markets and watch things carefully in this economy.

Let me -- okay, I'll take your questions.

Q How long will it take, after it's passed, to get the checks out to the American people, and is this package robust enough to avoid a recession?

SECRETARY PAULSON: Well, let me deal with the first question first, and say this is something I spent a lot of time on since we began thinking about this. And I think people will be pleasantly surprised, as we've worked with the IRS, we're going to do things that we weren't able to do in the past and move more quickly. So in my judgment, within 60 days of enactment, with just the caveat that for about a two-week period beginning in the middle of April, there's a very heavy load, a lot of payments going out of Treasury, and so that's got to be the priority. But with that as a caveat, within roughly 60 days, more or less, we will be able to begin making payments; some electronic, some by check. And then, again, looking at something like 117 million people, I believe that we can get the lion's share of these payments done in something under 10 weeks from the time we start mailing them.

Now, in terms of the economy, remember what I said -- and I have not changed my view on this -- the economic growth, there's no doubt it slowed, and it slowed rather markedly at year end. But in my judgment, it's going to continue to grow at a slower pace in here. But the risks are clearly to the downside, and given the facts that the risks are to the downside, it's too much of a cost to wait. And so what we're attempting to do here is to take quick action to provide a boost to the U.S. economy. And, again, I think what's going to help us here is that we have a program which is simple -- we knew if it was going to be complex it was going to be hard to move quickly. So we have something that's simple, broad-based, that's going to be effective because it's focusing on the consumer and focusing on getting business, making investments quickly, speeding that up, hiring people. So you're focused on those two, and it's going to be temporary.

So, again, this is not going to get in the way or sidetrack the efforts to do important long-term things or get in the way of efforts to balance the budget. So it's simple, it's going to be fast, if we can continue to work to get it through Congress quickly.

Q Secretary Paulson, Senate Democrats have made it clear that they want to add more to this package; they want to see an extension of unemployment benefits, some increases to the food stamp program. If this package gets more expensive in the Senate, is that going to be a deal breaker?

SECRETARY PAULSON: I never speculate as to what may or may not happen or what's the deal breaker. Let me step back and remind everybody that, first in the meeting on Thursday and then in the meeting we had on Tuesday that set the stage for this -- and that was a bicameral meeting, so we had the leaders of the Senate and the House. And both Harry Reid and Mitch McConnell took the lead in saying, this is too important, we need to move quickly -- so start in the House, work on a bipartisan basis, and we're very supportive of this; this is our will, okay? So we've done that.

Now, I recognize the Senate has an important role to play. I continue to believe the principles we have here are the right principles. This agreement reflects those principles. I will be up later today talking with Max Baucus and Chuck Grassley in talking about this. And we know that the Senate is very important and they're going to go through their own deliberations.

But, again, I think the American people are not going to have a lot of patience for taking time. And I think the House has set a standard, and it's a very important standard, and the American people -- we owe the American people speed, and we owe them a package that's going to work.

And that's the other thing that's key here. In the past, you've seen "different stimulus bills" where there are parts of it that really are going to have very little to do with stimulus or very little to do with making a difference in this year. And so the House has been disciplined, it set a high standard, and I'm looking forward to working with the Senate.

Q Are you open to adding more?

SECRETARY PAULSON: Again, I'm not going to speculate. I think what we've got is great. I'm very open, as is everyone, to working with the Senate. But again, right after we've completed something that we think is effective and is going to work -- and again, I appreciate the leadership of the Senate, (inaudible) Reid and McConnell making this possible. If they hadn't said, go work with the Senate, and said, we want to be part of this process early on, it would be very difficult to get where we are as quickly.

Q Secretary Paulson, can you just explain why you don't want to extend the unemployment insurance, if the goal of it is to stimulate the economy and to help people who are having trouble in the downturn? And secondly, would you be open to the idea of a second bill that would -- maybe that might allow you to give some time --

SECRETARY PAULSON: We have unemployment insurance, and unemployment insurance kicks in when it's needed. Okay, this is -- what this bill is, this proposal, which is going to very quickly become legislation and very quickly going to be passed by the House, this is aimed at providing benefits to working families, and it's clearly going to be stimulus. And that was a very important test -- and at businesses. We wanted to keep it simple, and that's where the focus is. And I'd say nothing other than that.

Q Any thought to the second bill?

SECRETARY PAULSON: Listen, I'm focused on this bill now. And there are going to be a number of policy priorities. We all have policy priorities, but the beauty of this is everyone agreed that for the good of the country, we're going to put those on a different track. This is on the fast-track. And let's get this done, and then let's think about other priorities.

Q When President Bush says that this package is the right size, is he sending a message to Congress, essentially saying, this is it; don't ask for anything in addition to --

SECRETARY PAULSON: Well, again, this is -- remember, this is Congress, this is the House, okay? This is not just President Bush. This is, we all agreed that the size -- and quickly came together on this. The President said, I think this should be big enough to be meaningful. He thought it should be $150 billion, and the House agreed. And that number was picked because it's enough to make a difference in an economy as big as ours, and not so big that it's going to jeopardize some of our long-term goals like balancing the budget.

Yes.

Q Mr. Secretary, so, based on your timetable, it sounds like checks will start going out early April, and you hope to have them done by June? You were saying about 10 weeks from now?

SECRETARY PAULSON: I said -- listen, what I said was, from the date of enactment, okay, getting legislation enacted, okay. Now, I've heard some optimistic people talk about enactment by the President's Day recess in February, mid-February. And what you heard me say was, we've been able to -- as we've thought this through, think through some very innovative processes we can put in place to do things that will be unprecedented by the Treasury if they could move and start getting payments out within 60 days of enactment.

Q Right, so then enacted in mid-February, and that would be April --

SECRETARY PAULSON: And then I said that there's going to be -- when we look at the 60 days, that there's going to be a period in the middle of -- two weeks in the middle of April when it's going to be difficult to have there be business as usual, because there's just a big load of payments that need to be made then, and that's got to be the top priority. But I think that again, if all works well, as fast as at least I can hope for, that we would be talking about starting to get checks out in May.

Q So do you have any concerns, then, that it's going to take too long to actually get to people?

SECRETARY PAULSON: Well, I would say this: This will get is -- when the checks get out, they'll make a difference right away. This is -- these are aimed at people who are going to be spending the money, and so this will make a difference right away. And, again, let me just make this point -- some of you heard me make it the other day: I spend a reasonable amount of time talking to economists who say, why in the world, at a time when our economy was growing at 5 percent in the third quarter, and we're -- it's clear it's slowing down, but you and a number of other people are -- have the view that in all likelihood we're going to continue to grow at a slower level, why are you acting now?

So what we're doing -- now, again, this is not a precise instrument, but we're doing something again which I think is pretty novel. When you look at how quickly the President started focusing on this, right after the new year, before he took off for the Middle East, he said to the country: We're considering stimulus. And I think the economy is -- long-term fundamentals are very healthy, that I believe we're going to continue to grow, but that the risks are on the downside, and I care so much about this economy I don't want to take those risks.

So, again, I think this is as quick as you will see anyone move with a stimulus package. Could it be quicker? Yes. Do I wish it were passed today and we could be mailing out the checks tomorrow? Yes. But we're going to move this as quickly as we can. The first thing is we've got to get it enacted, because until it's enacted, then we can't start the -- start working to get the checks out.

Q Mr. Secretary, you talk about --

SECRETARY PAULSON: I never get anybody -- I'll go with the back, and then I'll go to you.

Q Mr. Secretary, does the AMT patch in any way -- the passage of that affect the stimulus payouts at all?

SECRETARY PAULSON: No. All I could say is that this -- there is no tax increase with this. The Democrats have waived their PAYGO rules --

Q No, but has the delayed enactment of the AMT -- that delay that goes until February, will that affect getting the checks out on time?

SECRETARY PAULSON: No. This will not -- that will not affect it. It will affect a number of filers, and it will reflect -- it would affect their returns. But it won't have an appreciable effect on this situation. Again, I tried to be -- 60 days, more or less, recognizing we've got this difficult period in April, and we're going to move very quickly.

Q You just spoke about the spirit of cooperation last Thursday, when you talked to the senators, as well as the leaders in the House. And yet Senator Reid has a release out that says the Senate will work to improve the House package by adding funds. Is that a deal breaker?

SECRETARY PAULSON: Again, I've got great respect for Senator Reid, because, remember, he set the stage for this. He was right there in the front. He was the first one to say, I defer to the House; take the lead. I'm going to continue to make the case here that we don't -- what we need is we need something that's going to be quick and be effective. And again, I don't know what he has in mind, but almost every spending program I've looked at, every infrastructure spending, doesn't meet the test of making a difference quickly, okay?

So the test we want to do, and what was so productive about the discussions in the House -- and I would say this: The Speaker and the Leader, both Nancy Pelosi and John Boehner, were incredibly disciplined, because there were all kinds of ideas that came in. And, you know, this thing could easily look like a Christmas tree. I made a joke when I was here last that Christmastime is long past, and we need something that's simple. And so it's easy. There are all kinds of ideas, but if you hold it up and you say, is this stimulus; how quick is this going to be; how quick will the money get out there this year -- I think if we can keep that discipline in the Senate, and I'm optimistic we'll be able to. Thank you.

Q Mr. Secretary, could you talk about how this is going to affect the housing market, and what elements it's going to contain to try to improve things there?

SECRETARY PAULSON: Yes, well, let me start by saying that what we don't have in this is a -- any program that would involve major government funds and would do things that would slow down the correction process in the housing market. So by and large -- and I'm going to talk about the housing in a minute -- by and large what this does is says, the biggest risk to the U.S. economy is housing, but rather than trying to distort that market, what we're going to do is do something which provides a boost to the overall economy to help cushion the impact of what's going on in housing.

Now let me talk about housing and what's in this. But to begin with, I want to step back and say that a very big initiative that we're driving is the HOPE NOW Alliance and avoiding preventable foreclosures and market failures; and there's these 108 million mortgages where their interest rates are going to be reset -- ARMs -- over the next two years. And I am quite optimistic that the program that has been put in place by the entire industry is going to lead to many modifications and fast-tracking these modifications in avoiding foreclosures. And even in the fourth quarter, the number of actions, modifications that were taken more quickly tripled versus the third quarter, and so I think that's going to make a difference.

Now, putting that aside, there are two things in this House package. One is the FHA modernization and, remember, we've got legislation passed by the Senate, passed by the House, and it's in conference. We need that legislation done. That's -- so that's part of this, and that's going to help on the -- with sub-prime mortgages, and that will be helpful.

The other thing is something which I've got to confess that, although I understand it, I didn't support it. We all -- when people talked about everybody didn't get everything they wanted -- and I guarantee you some people got a few things they didn't want -- so when you looked at the -- what there is, is, with regard to the GSEs, in this bill will be a provision that raises the conforming loan-limit. So that's for jumbo mortgages, for the GSEs, for a temporary period of time, and this will be until December 31 -- so a temporary period of time. And both the House -- and I very much, I know how committed Barney Frank is to say this will not get in the way of GSE reform. And I really commend Chairman Chris Dodd for making a similar statement about working on GSE reform, because it's essential.

Now, just so you know my view on that, my view -- and I was very clear on this throughout the side, but I got run down by a bipartisan steamroller -- I mean, Republicans and Democrats reunited on this, because I have said -- and I think I was one of the first people to say it would be very helpful to raise the loan limit for the GSEs for a temporary period of time, given what's going on in that market. It will be very helpful. But I -- longer term, of course, that flies in the face of their affordable housing mission, and I saw no reason why we couldn't get it as part of GSE reform legislation, because I think we need reform legislation, and I was somewhat skeptical that without this, we wouldn't get the reform. So now I've got to be an optimist and work for the reform, and look at the good that will come as a result of this.

But any event -- yes, in the back.

Q Mr. Secretary, what do you have in this package anything for the small businesses? They are in trouble, and many of them are really going out of because they are fearing about the falling dollars and also trade deficit, especially with China and other countries.

SECRETARY PAULSON: Well, here's the small businesses -- I would say there's many -- small businesses are doing pretty well in this country right now, and they've benefited greatly by the rate reductions. Eighty percent of the small businesses in this country pay taxes at flow-through small businesses at the top two rates, and so that's been a help.

But to get to your question with small businesses, there are two parts to this. One is -- on the business -- one is 50 percent bonus depreciation, and of course, that helps all businesses, small businesses also. And then section 179 -- and this deals with expensing, and it -- by and large, what you're really talking about is small businesses there. And what we've done is we've raised the cap to allow expensing for larger projects. And so that will be very helpful to small businesses. So I'm glad you asked the question.

Q Mr. Secretary, how concerned are you right now about the level of the dollar?

SECRETARY PAULSON: I would say this -- and you've heard me continually make this, and I'm going to keep making it, because it's got the added virtue of being totally true -- that a strong dollar is clearly in our nation's interest. And our nation, like any others, our economy goes through ups and downs. You've just heard me say a while ago, I believe our economy is going to continue to grow, and now I'm going to say -- and I believe our fundamental long-term strength is going to be reflected in the currency markets.

Thank you.

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FACT SHEET: NEW GROWTH PACKAGE MEETS CRITERIA TO KEEP OUR ECONOMY HEALTHY

New Growth Package Meets Criteria To Keep Our Economy Healthy

Bush Administration Reaches Bipartisan Agreement With House Speaker Nancy Pelosi And Republican Leader John Boehner On Measures To Keep Our Fundamentally Strong Economy Growing

Today, President Bush announced his Administration reached a bipartisan agreement with House leadership on an economic growth package, and he encouraged Congress to deliver a bill to his desk as soon as possible to bolster the economy this year. The President's advisors and many outside experts expect that our economy will continue to grow over the coming year, but at a slower rate than we have enjoyed for the past few years – and there is the risk of a downturn. The agreement reached today meets the criteria the President set forward last week to provide an effective, robust, and temporary set of incentives to protect the health of our economy and encourage job creation. If enacted in a timely manner, it is expected to help create more than half a million jobs by the end of 2008.

The Growth Package Includes Measures To Bolster Both Business Investment And Consumer Spending, Which Are Critical To Economic Growth

The agreement reached today would allow Americans to keep more of their money to stimulate consumer spending. The growth plan provides approximately $100 billion in temporary relief that will allow Americans to keep or spend more of their incomes. Under the agreement:
- In 2008, taxes would be cut from 10 percent to zero percent on the first $6,000 dollars of taxable income for individual taxpayers and the first $12,000 of taxable income for couples. Taxpayers could receive rebates of up to $600 for individuals and $1,200 for couples. A minimum of $300 per person and $600 per couple would be available to those with at least $3,000 of earned income. This relief would be available to everyone with taxable income less than $75,000 for singles and $150,000 for married couples filing jointly. It will be phased out for taxpayers above those income thresholds.
- Everyone eligible for this relief would also receive an additional $300 per child. For example, this would mean up to $1,800 of tax relief for an eligible couple with two children.
The agreement would also offer incentives to spur business investment. The agreement would save businesses approximately $50 billion in near-term taxes through a temporary change to the tax code that will allow American businesses that buy new equipment this year to deduct an additional 50 percent of the cost of their investment in 2008. This will encourage businesses to expand and create new jobs now because buying equipment, software, and tangible property this year will dramatically lower their taxes. The agreement also increases expensing for small businesses.

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The Agreement Reached Today Adheres To Principles President Bush Set Forward Last Week To Guide Deliberations

The growth package:

Is big enough to make a difference in an economy as large and dynamic as ours. The package is approximately $150 billion, an amount sufficient to provide a boost to the economy.
Is built on broad-based tax relief that will directly affect economic growth, not Federal spending that would have little immediate impact on our economy. The package is not a collection of spending programs – it does not include any government outlays beyond the minimum rebate check and refundable child tax credit.
Is temporary and will take effect right away so we can get help to our economy when it is needed most. The personal tax relief will begin to stimulate consumer spending and additional economic growth within about 60 days of enactment, when the first rebate checks are expected to go out.
Does not raise taxes or include wasteful spending provisions.

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The Growth Package Announced Today Would Use Proven Methods To Keep Our Economy Healthy

The experience of the 2001 and 2003 tax cuts shows that providing tax relief to families stimulates the broader economy by boosting household spending. For example, rebate checks increased total consumption by about 0.8 percent in the quarter that the 2001 rebates were received and about 0.6 percent in the subsequent quarter. As the non-partisan Congressional Budget Office noted, "Most analysts agree that the 2001 rebate stimulated the economy."

The approximately $100 billion of individual tax relief included in the growth package represents a substantially larger amount than the tax rebates of 2001. In 2001, $38 billion was distributed in rebate checks, amounting to 0.4 percent of GDP. $100 billion amounts to 0.7 percent of current GDP.

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Members of QGA's Investigations & Oversight Practice

Jack Quinn. As White House Counsel under Bill Clinton, Jack handled for President Clinton a number of investigations undertaken by several congressional committees. Since leaving the White House, Jack has shared his experience and insight with numerous QGA clients and has served as a television commentator on government investigations.

Jeff Connaughton. Jeff brings the insight and experience of having served in the White House Counsel's Office from 1994-1995 where he dealt with numerous issues arising from multiple congressional investigations of the White House and Clinton Administration. He also worked for then-Chairman Joe Biden of the Senate Judiciary Committee during 1987-1991.

Allison Giles. As Chief of Staff to the Ways and Means Committee (2001-2006), Allison worked with the Administration on Medicare prescription drug oversight and implementation issues. During that time, the Committee led extensive investigations on pricing practices and costs associated with tax-exempt organizations and an in-depth investigation of a tax scheme by prison inmates which resulted in significant IRS reforms.

Kevin D. Kayes. Kevin was most recently Chief Counsel to incoming Majority Leader, Harry Reid and before that was Staff Director and Chief Counsel on the Senate Commerce Committee for Senator Ernest F. Hollings during his tenure as Chairman and Ranking Minority Member of the Committee. During his tenure on the Commerce Committee, Kevin was involved as the committee conducted investigations into various corporations and industries. This included the investigation into the Enron Scandal that helped lay the groundwork for subsequent Senate Banking Committee hearings and enactment of the sweeping Sarbanes-Oxley legislation, as well as an investigation of the Boeing Tanker Deal with the U.S. Air Force.

Sue Garman Kranias. Sue has spent most of her career helping corporations manage issues and crises. She has worked with clients to mitigate the damage caused by acute and negative accusations surrounding investigations by state attorneys general, the Justice Department and FTC, as well as during congressional oversight.

David Lugar. David has advised several clients who have come before the Energy and Commerce O&I Committee. For more than a year, one of the firm's energy clients was continually asked for varying documents and asked to testify before the Subcommittee. David supported and advised the client throughout this process. Ultimately, the investigation was dropped. Additionally, David has represented several companies before the Senate Homeland and Governmental Affairs Committee.

Nick Maduros. Nick joined QGA at its inception in January 2000. Nick works with clients on a wide range of legislative and regulatory matters from financial services to agriculture to Native American issues. Additionally, he has assisted a number of clients in the resolution of international trade disputes and the negotiation of trade agreements. He has expertise in advising companies involved in civil or criminal legal proceedings. Prior to joining QGA, Nick worked as an attorney in Arnold & Porter's Public Policy Practice Group where he represented clients before Congress, the Administration and various independent agencies. Nick has also worked as an attorney in the Washington office of Verner, Liipfert, Bernhard, McPherson & Hand and at an educational technology company as counsel to the Chairman and CEO.

ABOUT QUINN GILLESPIE & ASSOCIATES

Quinn Gillespie & Associates (QGA) provides public affairs counsel to leading corporations, coalitions and trade associations. One of the only firms to integrate lobbying and communications services, QGA's team of nearly 30 professionals bring a bipartisan, multi-disciplinary approach to helping clients successfully manage public affairs challenges. For more information, please visit www.qga.com or contact Stacey Morton Bowlin at 202-429-6879.

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