WASHINGTON — House Democrats, working with President-elect Barack Obama, unveiled an $825 billion economic recovery package on Thursday to create jobs, help workers hurt by global trade and put money back in the hands of consumers.
In addition, Congress approved the release of the final $350 billion of the $700 billion financial bailout as the Senate rejected blocking the funds by a 52-42 vote.
Progress on the stimulus package, and on the infusion of government funds into Bank of America Corp., helped retail shares advance 3.9 percent, their second-strongest rise this year.
Seeking to combat the worst U.S. recession in decades, the economic proposal would provide $275 billion in tax cuts to workers and businesses and $550 billion for domestic spending programs over two years. The legislation aims to create or save 3 million to 4 million jobs by pumping funds into new programs to repair the nation’s aging roads, bridges and highways, as well as alternative energy programs and education initiatives.
“This recovery package will provide tremendous tax relief, health care and job training benefits for families struggling to make ends meet, while also giving businesses the boost they need to create new jobs,” said House Ways and Means Committee chairman Charles Rangel (D., N.Y.).
House Democrats said they are pushing for passage of the economic stimulus legislation by mid-February. The Senate has not unveiled its version.
Democrats dropped a key provision from the legislation proposed by Obama that would have given a $3,000 tax credit for each new job created by private companies. However, leaders added a provision that had not been promoted directly by Obama — an expansion and overhaul of trade adjustment assistance, a federal program that provides aid to workers who lose their jobs due to international trade.
The bill would expand that program to service workers who lose their jobs and extend coverage to manufacturing workers. Workers would also receive a total of $43 billion for increased unemployment benefits and job training over two years.
On the tax front, the package provides a $500 tax credit for individuals and $1,000 for families. Business tax breaks include an extension of net operating losses to five years to allow businesses to more easily borrow funds, extending a 50 percent bonus depreciation for two years, an extension of small business expensing and expansion of the work opportunity tax credit for unemployed and troubled youths and recently discharged veterans.
In separate action, Rangel reintroduced a trade enforcement bill with Rep. Sander Levin (D., Mich.) that would create a congressional trade enforcer to investigate barriers to U.S. exports.
Meanwhile, the Standard & Poor’s Retail Index rose 10.29 points to 274.94. The index rallied as much as 5.7 percent before losing ground in the final hour of trading.
Weighing the impact of the global slowdown on fashion, Moody’s Investors Service cut its debt ratings on Marks and Spencer Group plc and Quiksilver Inc.
Marks and Spencer’s senior unsecured and short-term debt ratings were reduced to “Baa3/P-3” from “Baa2/P-2.” The outlook is stable.
Quiksilver’s corporate family and probability of default ratings were lowered to “B3” from “B2” and the rating on the firm’s $400 million in senior unsecured notes was cut to “Caa1” from “B3.” Debt with a “Caa” grade is deemed to be “subject to very high credit risk.” The outlook is negative.