Showdown Nears on Stimulus Bill
Senate Panel's Version More Generous Than Bush-House Plan

By Jonathan Weisman
Washington Post Staff Writer
Thursday, January 31, 2008

With bipartisan support, the Senate Finance Committee yesterday approved a $157 billion economic stimulus plan that rivals the measure fashioned by President Bush and House leaders, setting up a Senate showdown today that could determine who will receive rebates from the federal government and how quickly the checks will arrive.

The Bush administration and House leaders had hoped the Senate would simply accept the stimulus plan approved by the House on Tuesday, ensuring final passage this week and the mailing of the first checks by May. Senate Minority Leader Mitch McConnell (R-Ky.) will try today to block the Senate from adopting the Finance Committee plan and force the passage of the House bill instead.

That effort received a blow yesterday when Sen. Charles E. Grassley (Iowa), the influential ranking Republican on the Finance Committee, threw his weight behind the Senate alternative. Finance Committee Republicans Olympia J. Snowe (Maine) and Gordon Smith (Ore.) also backed the bill.

"Concern with timing must be weighed against the question of the quality of the House bill," he said, singling out that plan's failure to include as many as 20 million retirees in the tax payment plan.

Senate Finance Committee Chairman Max Baucus (D-Mont.) is counting on Democrats to stay unified behind their leadership, and said that if enough Republicans join Grassley, a threatened filibuster by McConnell would be broken and the House and Senate would be forced into negotiations on a final stimulus bill.

But with only three Republicans on the Finance Committee voting for the package, and Sens. Hillary Rodham Clinton (D-N.Y.) and Barack Obama (D-Ill.) absent, Baucus's ability to round up 60 votes to thwart a filibuster is far from certain.

Senators added provisions to the Finance Committee bill to make a "no" vote on the Senate version very difficult, offering federal stimulus checks to 20 million low-income seniors and 250,000 disabled veterans who would be ineligible under the compromise worked out by Bush and House leaders. Senators also tightened wording in the House bill to make it more difficult for illegal immigrants to claim a check.

After the Finance Committee vote, AARP launched a lobbying push to win passage of the Senate version. Advocates of the Senate bill said House-Senate talks should take a few days.

The Senate Finance Committee bill would send checks to virtually every American. Individuals would receive $500 -- for couples, it would be $1,000 -- plus $300 per child. Workers who can show $3,000 in earned income last year -- or seniors who had $3,000 in Social Security benefits -- would also qualify, even if they earned too little to pay income taxes.

After a revolt among Senate Democrats, Baucus added income caps on eligibility that he had initially rejected, but they are considerably more generous than the ones imposed by the House. Rather than capping eligibility for the full check at $75,000 for individuals and $150,000 for couples, the new bill phases out eligibility at $150,000 for individuals and $300,000 for couples. The committee also said no member of Congress would qualify.

The Senate bill extends unemployment benefits by 13 weeks, includes tax incentives for business investment similar to the House's and allows businesses more generous tax write-offs for their losses.

It adds $5.5 billion worth of tax-credit extensions for wind, solar and other alternative energy sources, as well as incentives for homeowners to make their homes more energy efficient. The committee also accepted an amendment to allow states to offer tax-free mortgage bonds for the ailing housing market.

All of those provisions were left out of the House bill.

Senators held back on the impulse to load up the package with pet provisions. Grassley and Baucus teamed up to vote down amendments from both parties, and some senators decided against offering changes they had promised.

Sen. Charles E. Schumer (D-N.Y.), who had held a news conference to promise a push for $500 million in mortgage counseling, backed off yesterday, declaring: "We have to thread the needle here. We want to improve the bill, but we don't want to take it so far from the House bill that we slow it down."

But the inclusion of tax breaks for oil and gas exploration, appliance makers and construction firms building housing for a glutted market could open the Senate to ridicule, warned Sen. Jon Kyl (R-Ariz.).

"What we've done today is to add a lot of provisions that are hard to defend as stimulative," he said.

The Senate will begin considering the House plan today. It promises $600 checks for middle-income individuals, $1,200 for couples, and $300 for workers too poor to owe income tax. Baucus will then be allowed to offer the Finance Committee bill as a substitute, and will probably need 60 votes to succeed. The showdown is likely to be close, with heavy pressure from McConnell and the White House weighing on Republicans.

Senate Majority Leader Harry M. Reid (D-Nev.) said he hopes for a final vote on one of the two stimulus bills tonight.

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