WASHINGTON (AP) – The House voted Tuesday to rush rebates of $600-$1,200 to most taxpayers, but a partisan battle brewed in the Senate over Democrats' efforts to add jobless aid and help for the poor to the economic stimulus package.
The House plan, approved 385-35 after little debate, would send rebates to some 111 million families and give tax breaks to businesses, costing $161 billion over two years.
President Bush and House leaders urged the Senate to take the bipartisan agreement and pass it quickly. Sen. Max Baucus, the Senate Finance Committee chairman, planned a Wednesday vote in his panel on a $196 billion package that could face a slower path to passage.
"The temptation is going to be for the Senate to load it up," Bush said in the Oval Office. "My concern is that we need to get this bill out of the Senate and on my desk."
Baucus' measure adds $35 billion for senior citizens and the unemployed, and shrinks the rebate to $500 for individuals and $1,000 for couples. It would deliver checks even to the richest taxpayers, who are disqualified under the House-passed measure.
Congressional leaders are aiming to send the package to Bush by Feb. 15. The goal was to start mailing out rebate checks in May and to have most of them to taxpayers by July so that people would spend the money and kick-start a slumping economy. But the divergent plans — and bids by Senate Democrats and some Republicans to enlarge the package with more add-ons — could drag out that schedule.
House Speaker Nancy Pelosi, D-Calif., said she hoped the Senate would "take this bill and run with it."
Senate Majority Leader Harry Reid, D-Nev., said that was unlikely in the freewheeling Senate, where members in both parties have elaborate wish-lists for adding to the bill, including food stamps, Medicaid and heating assistance for low-income people and spending on infrastructure projects, among other things.
"I think that there's 51 Democratic senators without exception who believe this package can be made better," Reid said, adding that he also expected to have substantial GOP support for changes.
Sen. Mitch McConnell, R-Ky., the minority leader, signaled he would try to block Baucus' measure and prevent senators from adding items.
"This is a time to show we can rise above partisanship, do something important and do it quickly," McConnell said. "The only way to achieve that would be to take up and pass the House-passed bill."
The House plan brought together Democrats and Republicans, both of whom surrendered cherished proposals to reach a deal.
Pelosi cautioned against adding items that could hinder an economic recovery or scuttle the bipartisan agreement.
"It's important that this bill not get overloaded. I have a full agenda of things I would like to have in the package, but we have to contain the price," Pelosi said. "We made a decision, because that's where we could find our common ground."
Republican leaders also described the measure as an imperfect compromise that would provide a needed jolt to the economy.
Americans "expect us to find ways to work together, not reasons to fight with each other," said House Minority Leader John Boehner, R-Ohio, who forged the agreement with Pelosi in consultation with Treasury Secretary Henry Paulson.
"The sooner we get this relief in the hands of the American people, the sooner they can begin to do their job of being good consumers," Boehner said.
The measure would send rebates to most income earners, including roughly 35 million families who don't make enough to pay income taxes. Individuals with adjusted gross income of $75,000 and couples making $150,000 would get rebates equal to the taxes they paid, up to $600 for individuals and $1,200 for couples. Those making more than that would see their rebate go down by $50 for each $1,000 of income over the limits.
All eligible people would get at least $300 — or $600 for couples. They would get an additional $300 per child.
In the Senate, Baucus' proposal removes the income caps and would send rebates to some 29 million senior citizens not covered by the House plan because they don't have income. It would send $500 per individual and $1,000 per couple to anyone earning more than $3,000, regardless of their income or how much taxes they owed.
Reid blasted the proposal to send rebates to those with higher incomes, saying it "causes me to want to gag." The feeling is widespread among Democrats, he added, saying the "the gag reflex is coming upon everybody" over the plan.
Baucus' measure also extends unemployment payments for 13 weeks for those whose benefits have run out, with 26 more weeks available in states with a 6.5 percent jobless rate or higher. His initial proposal would have provided the longer extension for any state whose unemployment rate exceeded 6 percent, but the trigger was raised to control the cost of the package. Only Alaska, Michigan, Mississippi and South Carolina have jobless rates of 6.5 percent or more.
The Senate plan would restore a business tax break dropped during the House negotiations that would permit corporations suffering losses now to reclaim taxes previously paid.
Both packages include roughly $50 billion worth of tax incentives for businesses to invest in new plants and equipment.
Baucus said he, too, wanted to avoid burdening his proposal with extras.
"The more that this is kept slimmed down and it's clean and simple, the better. I do not want it loaded up with lots of other provisions," Baucus said. "Nobody wants to be held responsible for stopping this from going through."
To address the mortgage crisis, the House bill would raise the limit on Federal Housing Administration loans from $362,790 to as high as $729,750 in expensive areas, allowing more subprime mortgage holders to refinance into federally insured loans. To widen the availability of mortgages nationwide, it also would boost the cap on loans that Fannie Mae and Freddie Mac can buy, from $417,000 up to $729,750 in high-cost markets. Those measures would expire at the end of the year.
Sen. Charles Schumer, D-N.Y, said Tuesday that he plans to ensure the housing provisions are part of the Senate stimulus bill.
On the Net:
Senate Finance Committee: http://finance.senate.gov/