President George W. Bush and congressional leaders yesterday agreed a $150 billion package of tax rebates and business incentives meant to ward off a recession.
The deal between the White House and leaders of the House of Representatives provides for tax rebates of up to $600 for individuals and $1,200 for married couples. Families with children would receive an additional $300 per child.
It marked a rare show of election-year co-operation between Mr Bush and the Democratic-led Congress who want to pump money into the softening economy in hopes of countering the blow from a mortgage crisis, credit crunch and a surge in oil prices.
"This agreement was the result of intensive discussions and many phone calls, late-night meetings and the kind of co-operation that some predicted was not possible here in Washington," Mr Bush said.
The hope is that the package will help calm fears of a US recession and encourage consumer and business spending to boost economic growth.
The legislation is intended to work in tandem actions by the Federal Reserve, which cut a key interest rate by three-quarters of a percentage point on Tuesday. Financial markets appear to have been buoyed by the developments.