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Last Updated: Tuesday, 29 January 2008, 23:01 GMT
US economy plan passes first test
Capitol Hill, Washington DC
President Bush has already warned the Senate not to delay the bill
The US House of Representatives has approved a $146bn (73bn) economic stimulus package proposed by President George W Bush to fend off a recession.

The measures include rebates for people with lower incomes as well as tax incentives for businesses.

Correspondents say while the package passed the House vote easily, its fate in the Senate will be less clear-cut.

There, both parties are backing a slightly more expensive package that favours the elderly and unemployed.

Significantly, the deal does not exclude benefits to the wealthiest as the current package does.

President Bush has already warned the Senate not to delay the bill which he says is crucial to America's economic well-being.

Rates slashed

Under the president's proposed package, some 117 million US homes would receive a rebate of up to $600 for individuals and up to $1,200 for married couples.

Couples with children will also get an extra $300 per child.

The tax rebates for households should total $100bn, while businesses will benefit from up to $50bn of tax cuts.

It follows the Federal Reserve's decision to slash US interest rates to 3.5% from 4.25%, its biggest cut in 25 years.

Economists say the package needs to be put into action as soon as possible, before it is too late to help the economy.

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