Senate offers own, pricier stimulus proposal
1/29/2008WASHINGTON - The Senate Finance Committee, moving to put its own stamp on a rescue plan for the ailing economy, unveiled a $156 billion fiscal stimulus package yesterday. The plan would pay $500 to most individual tax filers and $1,000 to couples, with an added $300 a child for families, and no income cap to disqualify high earners.
The Senate package would cost more than the stimulus plan agreed to last week by President Bush, House Speaker Nancy Pelosi, and the Republican leader, Rep. John A. Boehner of Ohio, but there are differences over how much more it would cost.
House officials now say their plan, to be voted on today, would cost $153 billion, according to revised estimates, up from last week's projected $150 billion. Some aides who worked on the House plan said Ms. Pelosi and Mr. Boehner had rejected some components in the Senate proposal as too expensive, and they predicted that the true cost of the Senate plan would be far greater than $156 billion, potentially derailing efforts by the White House and congressional leaders to boost the economy as quickly as possible.
The Senate proposal is less generous to some but more generous to others. For example, a household with two working parents and two children would most likely receive $1,800 under the House plan but only $1,600 under the Senate plan.
But the Senate plan would send $500 checks to some 20 million Americans over age 62 living only on Social Security who would be excluded by the House plan. The Senate plan would also extend unemployment benefits by 13 weeks in all states, in addition to the 26 weeks provided currently - at a cost of about $12.5 billion. The House would not extend unemployment payments at all.
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.
Like the House plan, the Senate proposal includes several tax breaks for businesses, including an increase in the amount of expenses that small businesses can write off immediately.
But the Senate added another incentive, allowing businesses to deduct losses from up to five years ago. Now, losses can be carried forward for two years.
The House plan, which Mr. Bush had urged Congress to approve as quickly as possible, would pay at least $300 to all tax filers with at least $3,000 in earned income, and would give rebates of up to $600 for individuals and up to $1,200 for couples. Those rebates phase out for individuals earning more than $75,000 and couples earning above $150,000.
Sen. Max Baucus (D., Mont.), the chairman of the Finance Committee who unveiled the Senate plan, said it would be discussed at a hearing tomorrow. The plan does not include other initiatives, such as spending on infrastructure, energy tax credits, or an increase in food stamps, that other senators may try to add when the committee meets.
The Senate's majority leader, Harry Reid of Nevada, has said he intends to bring the stimulus proposal to the floor for a vote as soon as possible, perhaps late tomorrow or Thursday.
The Senate, simply by drafting a different proposal, would have to reconcile its stimulus bill with the measure the House is likely to approve today, requiring additional work and votes, before a final version could be sent to the White House. Mr. Bush has warned against complicating the House stimulus package. And a White House spokesman, Tony Fratto, echoed that yesterday. "There was remarkable bipartisan cooperation with the House," Mr. Fratto said. "The Senate is threatening to create partisan conflict by trying to put in additional programs."
House Republicans quickly accused Senate Democrats of jeopardizing the stimulus effort.
Ms. Pelosi, however, said she remained confident. "I'm optimistic that we will have a plan that is timely, passed very quickly, targeted to those who will spend it and inject demand into the economy to create jobs and turn around the downturn," she said yesterday.