US House passes stimulus package | News | Al Jazeera

US House passes stimulus package

Move comes as FBI launches probe into 14 companies for improper sub-prime lending.

    Fallout from the sub-prime mortgage crisis has led to fears of a US recession [EPA]
    Henry Paulson, the US treasury secretary, praised the House of Representatives for passing the bill and urged the senate to do the same as fears of a US recession grow.
     
    However, the US senate recently put together its own $156bn plan with different levels of tax rebates.
     
    The Bush administration is keen to enact the stimulus package into law as soon as possible following the economic fallout over the sub-prime mortgage scandal, falling home prices and a downturn in the US manufacturing sector.
     
    'Time to act'
     
    Both the senate and House of Representatives plans would include tax rebates sent to households - in an effort to stimulate consumer spending - and also business tax breaks aimed at encouraging investment.
     
    However, the senate plan would, in addition to having different tax rebate levels, extend unemployment insurance and offer lower rebates for most taxpayers than the House package.
     
    Both chambers must pass identical legislation in order to send a measure to the White House.
     
    "If enacted quickly, as I hope it will be, the House package will inject money into our economy in time to help create more than 500,000 jobs before the end of the year," Paulson said.
     
    "I am confident that senate leaders understand that speed and simplicity are key to getting a bipartisan agreement enacted. The time to act is now."
     
    The House backing comes as the US Federal Reserve is holding a two-day meeting to decide whether to cut US interest rates further, following a surprise cut of three quarters of a percentage point a week ago.
     
    Analysts are hoping for a cut of at least half a per cent.
     

    FBI probe

     

    It also comes as the FBI launched investigations into 14 corporations as part of a crackdown on improper sub-prime lending, including accounting fraud and insider trading.

                   

    An agency official said some of the probes overlapped with the Securities and Exchange Commission which has opened three dozen civil investigations into the sub-prime market collapse.

     

    Neil Power, head of the FBI's economic crimes unit, said the companies include developers, sub-prime lenders, companies that provided loan securities and investment banks.

     

    The FBI said it anticipated more "mortgage corporate fraud potential cases" this year.

    SOURCE: Agencies


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