WASHINGTON — Republicans will push to lower mortgage rates to 4 percent and cut the lowest tax rates when the Senate begins consideration of its economic stimulus plan Monday, Senate GOP Leader Mitch McConnell said Saturday.
In the party's weekly radio address, McConnell urged bipartisan cooperation.
"Earlier this week, President Obama came to Capitol Hill to speak with members of my party about his plan for an economic recovery bill," he said. "The President said that a stimulus package is needed to revive the nation's troubled economy, and to help the millions of Americans who've been affected by it. And Republicans in Congress agree."
Under the mortgage plan, any "credit-worthy borrower" could get a government-backed loan at 4 percent. Details were not available, but Republicans have talked about having the government guarantee the 30-year loans for a year or two. Thirty-year fixed rates recently have been around 5 percent.
No cost estimates were available for the McConnell plan. Democrats, who will be crucial to its success since they control 58 Senate seats, have not ruled out backing such a plan, but wanted to see more details. The Senate version of the stimulus bill is now costing $889 billion, about $70 billion more than the one passed this week by the House. The increase is largely due to changes in tax breaks.
McConnell estimated Saturday that under his mortgage plan, the average family would see its monthly mortgage payment drop by $466 a month, or $5,600 a year. Over the life of a 30-year loan, that's a savings of $167,760.
His second idea would be to cut income tax rates.
Currently, according to GOP data, married couples pay a 10 percent tax on income up to $16,700.
Republicans would cut that rate to 5 percent, meaning a savings of about $500 per couple.
They would also reduce by 5 percentage points the 15 percent rate now levied on couples earning between $16,700 and $67,900, saving working couples another $1,100, according to Republican estimates. Single filers would get similar reductions. Either way, everyone who works and pays income tax would see an immediate increase in pay, Republicans say.
McConnell rejected the House Democratic plan. Democrats rejected the lower tax rate idea, calling it too expensive.
"Democratic lawmakers in the House of Representatives produced a massive bill that many analysts say is unlikely to create new jobs or boost the economy anytime soon," McConnell said. "Most of the infrastructure projects it includes won't impact the economy for at least another year. Permanent spending would be expanded by about $240 billion, an increase that would lock in bigger and bigger deficits every year. And the bill is loaded with wasteful spending:"
The nonpartisan Congressional Budget Office estimated that about two-thirds of the bill would pump money into the economy by Sept. 30, 2010.
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