Family Relief and Economic Stimulus Act

Family Relief and Economic Stimulus Act - Allows federal-state agreements for payment of emergency unemployment compensation to individuals who have exhausted their rights to such compensation.

Amends the Internal Revenue Code to: (1) allow individuals who are facing foreclosure to make penalty-free withdrawals from tax-exempt retirement plans; (2) extend through 2008 the tax deduction for dividends received from controlled foreign corporations; (3) suspend the excise tax on gasoline, diesel fuel, and kerosene for a specified period in 2008; and (4) adjust the basis of certain capital assets for inflation for purposes of determining gain or loss for income tax purposes.

Provides additional funding to state and local governments for the redevelopment of abandoned and foreclosed upon residences and for the weatherization of homes of low-income families.