Jan. 28, 2008 – 9:32 p.m.
A $150 billion stimulus package is headed for a House vote Tuesday as Congress moves quickly to try to cushion the economy against a recession.
Meanwhile, Senate Democrats laid out a more ambitious stimulus plan Monday, with payments to more individuals than the House legislation. Also, unlike the House bill, the Senate’s legislation would extend unemployment benefits.
The House bill (
The House vote will come five days after the chamber’s leaders announced a rare bipartisan compromise on economic policy, agreeing to provide cash to individuals and incentives to businesses while abandoning more aggressive spending measures or tax cuts that some had proposed.
But the Senate could be a significant obstacle, as the Finance Committee marks up its substantially different bill Jan. 30.
That plan, outlined Monday by Chairman
Baucus’ $156 billion proposal would extend unemployment insurance for 13 more weeks beyond the usual 26 weeks. Workers in states with unemployment rates above 6 percent would receive an extra 13 weeks of benefits, for a total of up to 52 weeks.
The House agreement does not include unemployment insurance, an omission that irritated Ways and Means Chairman
Baucus’ plan would expand proposed payments to senior citizens, who would qualify based on their Social Security income. Some might not qualify under the House plan because they did not work in 2007 or did not pay income taxes.
Baucus’ proposal also does not include income caps in the House proposal and outlines a different payment structure. Workers with $3,000 in income would receive $500 payments, up from $300 in the House bill. But the maximum payment to couples would be $1,000, compared with $1,200 in the House bill. Both plans would provide a $300 per-child bonus.
“A stimulus package will have a better chance of kick-starting America’s economy if Americans know what the benefit is, if more can participate, and if dollars get directly to those who need them now,” Baucus said in a statement.
Jim Dau, a spokesman for AARP, praised the package. He has been urging lawmakers to include the unemployment insurance extension and to broaden the rebates to include Social Security recipients.
Like the House bill, the Senate Finance proposal would provide bonus depreciation for all companies and additional expensing for small businesses. However, the Senate bill would go further, allowing companies losing money in 2006 and 2007 to count those losses against profits from the prior five years. The companies could then show reduced profits from the past and get back some of the taxes they paid.
Senators have suggested potential changes, including more-generous food-stamp payments, money for road resurfacing, energy tax breaks, low-income heating assistance and aid to states.
It’s unclear whether the changes proposed by Baucus would prompt a veto threat from Bush, a filibuster from Senate Republicans or difficulty in the House if they were included in the overall package.
“This is a package in sync with the House bill but stronger and broader,” said Sen.
Rep.
If the Senate adds those provisions and House Democrats ratify that approach, Republicans would have to depend on their ultimate backstop. “The White House becomes very critical in this process in what they will stand up to and this president will stand up to,” Cantor said.
The House bill features $103 billion of direct payments to taxpayers, aimed at encouraging lower- and middle-income Americans to spend the money quickly.
The checks would start at $300, for people who had wage income of at least $3,000 during 2007. Depending on their incomes, married couples could receive a maximum of $1,200, plus a $300 bonus per child. The benefit phases out for single people earning more than $75,000 a year and married couples earning more than $150,000.
The bill text refers to the payments as “advanced refunds.” However, the payments would have no impact on taxpayers’ refunds this year or next year; they are essentially one-time payments from the Treasury to qualifying individuals.
Both bills also include provisions designed to spark business investment. Companies would be able to write off half the cost of certain purchases made in 2008, instead of depreciating them over a longer period.
Small businesses also would receive more-generous deductions for equipment purchases. The measure would raise the size of mortgage loans that the Federal Housing Administration (FHA) could insure and that Fannie Mae and Freddie Mac could purchase.
Despite bipartisan support and White House encouragement, a broader FHA overhaul will not be included at Paulson’s request, said Steve Adamske, a spokesman for
Libby George contributed to this story.


