Senate to Offer Own Stimulus Package
Tuesday, January 29, 2008
The chairman of the Senate Finance Committee yesterday unveiled a rival plan to stimulate the economy, offering a $500 check to virtually every American -- including low-income seniors and rich financiers -- in a direct challenge to the bipartisan deal reached last week by President Bush and House leaders.
The $156 billion measure by Sen. Max Baucus (D-Mont.), which will be drafted by the committee tomorrow, also would extend unemployment benefits for the long-term jobless by 13 weeks, a proposal that had been rejected by Bush and House Republican leaders as they crafted their $150 billion stimulus package.
That delicate compromise, unveiled last week, proposed to cap eligibility for somewhat larger tax rebates at $75,000 for individuals and $150,000 for couples.
With the strong backing of Senate Majority Leader Harry M. Reid (D-Nev.), the package that emerges from the Finance Committee is likely to pass the Senate, forcing House-Senate negotiations that Bush and House leaders had hoped to avoid. The House is expected to approve its stimulus plan today.
"Rebates for seniors and payroll taxpayers, extended unemployment insurance and tax relief for struggling businesses will put more cash into the American economy right away," Baucus said. "The White House says we mustn't slow the economic stimulus agreement down, or blow it up. I agree. We're going to improve it and get it passed right away."
Baucus's proposal is only the start of revisions. Senators have promised to add heating assistance for the poor, food-stamp money, more business tax incentives and road-resurfacing funds, among other items.
"This is a package in sync with the House bill but stronger and broader," said Sen. Charles E. Schumer (N.Y.), a member of the Democratic leadership. "Once the package gets to the floor, I will make an effort to add $500 million of emergency foreclosure-prevention funding. The housing crisis is at the heart of the economic slowdown, and more must be done about it."
House Democratic and Republican leaders largely held their tongues, refusing to speculate on how much the Senate's efforts could slow down their efforts to fast-track the stimulus plan. "Everything that I've heard coming out of the Senate seems to be timely, temporary and targeted," said House Speaker Nancy Pelosi (D-Calif.).
But privately, House leaders were fuming. In difficult negotiations last week, they extracted the income caps as a key concession, allowing them to secure rebates for workers who earn too little money to pay income tax and to set rebate checks for middle-income workers at $600 for individuals and $1,200 per couple.
In his State of the Union address last night, Bush said that "the temptation will be to load up the bill" and that "this would delay it or derail it, and neither option is acceptable."
House Ways and Means Committee Chairman Charles Rangel (D-N.Y.) said last night that Baucus and the Senate were on "thin ice" with the new plan. "By eliminating the income cap, we would only further grow the divide between rich and poor that has already grown so much under President Bush's tax policies," Rangel said. "I am concerned that this expansion would jeopardize the entire stimulus package."
Baucus's proposal would actually increase the size of payments to the poorest workers, to $500 from the House's $300, and would include poor seniors by extending eligibility to anyone who receives $3,000 in Social Security income. But middle-income taxpayers would pay a price, losing $100 in payments to individuals or $200 in payments to couples. Almost all taxpayers would still receive $300 per child younger than 17.