House Passes Economic Stimulus Package

The House passed a $146 billion economic recovery package. The package faces an uncertain future in the Senate, where lawmakers in both parties are trying to tack on billions for senior citizens and the unemployed.

J. Scott Applewhite

The House approved the plan to speed rebates of up to $600-$1,200 to most income earners while giving tax breaks to businesses.

"We're talking about the heart of America -- hardworking middle class people that are now being targeted because they can't afford to take care of their families," said Rep. Charles B. Rangel, D-N.Y.

In the Senate, Max Baucus, the Finance Committee chairman, set a Wednesday vote on a roughly $160 billion version he unveiled Monday, which would give $500-$1,000 rebates to a broader group, including older Americans living off Social Security as well as wealthier taxpayers, and would extend unemployment benefits.

"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," said Baucus, D-Mont. "Nobody wants to be held responsible for stopping this from going through."

Majority Leader Harry Reid, D-Nev., hopes to pass the measure by week's end, but Republicans cast doubt on that timetable.

"I hope the Senate won't get too bogged down in trying to make too many changes," Sen. Mitch McConnell, R-Ky., the minority leader, told Fox News. McConnell has urged the Senate to simply endorse the House agreement, which would send it to Bush right away.

A vote this week is "a nice idea," but it's unrealistic, said Don Stewart, McConnell's spokesman, since senators in both parties want a chance to add to the plan, pushing a final vote to next week at the earliest.

President Bush used his State of the Union message Monday night to pressure the Senate to resist the temptation to "load up the bill."

"That would delay it or derail it, and neither option is acceptable," the president said. "This is a good agreement that will keep our economy growing and our people working."

The House plan brought together Democrats and Republicans, both of whom surrendered cherished proposals to reach a deal. The White House and congressional leaders agree it is critical to enact an economic recovery package as soon as possible to help head off a recession and boost consumer confidence.

Senior House Democrats were among those warning the Senate not to tinker too heavily with the package their leaders negotiated. Rangel said Monday that Baucus was "walking on very thin ice" with his proposal to send rebates to wealthier taxpayers, which he said could jeopardize the entire package.

Senate Republicans were as eager as Democrats to revamp the plan. Several GOP senators backed the proposal to extend unemployment payments for 13 weeks for those whose benefits have run out, with 26 more weeks available in states with the highest jobless rates. Some also have sought more business tax breaks.

"Many of these additions have bipartisan support, and I hope that the president will recognize that the White House needs to negotiate with the Senate as well as the House," said Sen. Susan M. Collins, R-Maine, who backs both the rebates for seniors and the unemployment extension.

Sen. Olympia J. Snowe, R-Maine, a Finance Committee member, called the unemployment extension "critical" and said she supported ensuring that the rebates reached the elderly.

Under Senate plan, some 20 million senior citizens not covered by the House plan because they don't have income would receive rebates.

Baucus' plan would send rebates to all Americans with earned income of $3,000 or more, while the House plan gives only partial rebates to individuals with adjusted gross incomes of more than $75,000 and couples with incomes in excess of $150,000, and no rebate at all to the wealthiest taxpayers.

It also would restore a business tax break dropped during the House negotiations that would permit corporations suffering losses now to reclaim taxes previously paid.

Congressional analysts were still crunching numbers to determine the final cost of the Senate proposal. In the House, they put out new estimates tallying the cost of the House plan at about $146 billion -- lower than the initial $150 billion estimate -- and said it would send rebates to about 111 million taxpayers rather than the 117 million previously projected.