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Vol. 72/No. 8      February 25, 2008

 
Congressional stimulus act
gives billions to big business
(feature article)
 
BY CINDY JAQUITH  
The Economic Stimulus Act adopted by Congress February 7 provides billions in tax breaks for big business, but little—if anything—for most workers.

Nancy Pelosi, Democratic speaker of the House, called the bill “a great deal for the American people.” President George Bush announced he would sign it, saying it “will help to stimulate consumer spending and accelerate needed business investment.”

The law is part of the government’s “solution” to the deepening economic crisis in the United States. But it will have little impact on those hardest hit by rising inflation and unemployment.

Under the measure people whose income was at least $3,000 last year—through earnings, Social Security benefits, or disabled veterans’ payments—will get a tax-rebate check. Those with higher incomes will get as much as $600, with the rebate phasing out for individuals earning more than $75,000. Those eligible for rebates will get an additional $300 for each child in the household.

Many workers will be excluded altogether, such as those whose unemployment payments have run out without their being able to find work. Undocumented workers are explicitly denied the rebate, despite the fact that many pay taxes.

The bill cuts business investment taxes by $44 billion for one year. It increases the size of home loans that can be backed or bought by government and semi-government housing and lending institutions, a measure aimed at appeasing the middle class.

Democrats initially said they would fight to get an extension of unemployment compensation into the bill. They quickly dropped that idea, along with a measure to increase funding for home heating aid.

Neither Democrats nor Republicans even considered raising the federal minimum wage, which stands at a miserly $5.85 an hour. By summer 2009, it will have risen to just $7.25.

The number of “severely poor” individuals in the United States increased by 26 percent from 2000 to 2005, according to an analysis of the latest census by McClatchy Newspapers. The study found that almost 16 million people live in “deep or severe poverty,” defined as a family of four with less than $9,093 annual income, or an individual living on less than $5,080 a year.  
 
 
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