Friday, November 6, 2009

President Barack Obama signed into law a $24 billion economic stimulus bill providing tax incentives to prospective homebuyers and extending unemployment benefits to the longtime jobless who have been left behind as the economy veers toward recovery.

The bill-signing at the White House Friday came a day after the House, displaying rare bipartisan agreement over the seriousness of the jobless situation, voted 403-12 for the measure. The Senate approved it unanimously on Wednesday.

The White House said the law, which also includes tax cuts for struggling businesses, builds on provisions in the $787 billion stimulus package enacted last February that aim at spurring job creation.

"The need for such a measure was made clear by the jobs report that we received this morning," the president said, citing Friday's government report the jobless rate hit 10.2% last month, the highest since 1983. The rate was 9.8% in September. "I will not rest until all Americans who want work can find work," he said during a Rose Garden appearance before reporters.

Lawmakers stressed that the fourth unemployment benefit extension in the past 18 months was necessary because initial signs of economic recovery have not been reflected in the job market.

The law provides another 14 weeks of benefits to all out-of-work people who have exhausted their benefits or will do so by the end of the year, estimated at nearly 2 million. Those in states where the jobless rate is 8.5% or above get an additional six weeks.

The extra 20 weeks could push the maximum a person in a high unemployment state could receive to 99 weeks, the most in history. Unemployment checks generally are for about $300 a week.

The tax credits, added by the Senate, center on extending the popular $8,000 credit for first-time homebuyers that was included in the stimulus package. The credit, which was to expire at the end of this month, will be available through next June as long as the buyer signs a binding contract by the end of April.

The program is expanded to include a $6,500 credit for existing homeowners who buy a new place after living in their current residence for at least five years.

Prolonging the life of the homebuyer credit has been a priority of the real estate industry, which says it has been instrumental in beginning to turn around a market that was a major cause of the economic downturn. About 1.4 million first-time homebuyers have qualified for the credit through August, and the National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.

The other tax credit allows businesses that have lost money in 2008 or 2009 to get refunds on taxes paid on profits during the five previous years.

The Senate spent more than a month crafting the package and working out partisan fights over amendments, angering lawmakers and others who pointed out that 7,000 people lose their unemployment benefits every day. The National Employment Law Project estimated that 600,000 workers exhausted their benefits in September and October while Congress debated the legislation.

The more than $21 billion cost of the tax credits would be paid for largely by delaying a tax break for multinational companies that pay foreign taxes — a fact President Obama touted.

"Now, it's important to note that the bill I signed will not add to our deficit. It is fully paid for and so it is fiscally responsible," he said.

The cost of the unemployment benefit extension, about $2.4 billion, is offset by extending a federal unemployment tax that employers must pay.