Congress Approves Stimulus Package

Senate Majority Leader Harry M. Reid briefs reporters. Behind him are Democratic Sens. Richard J. Durbin, left, Max Baucus and Patty Murray.
Senate Majority Leader Harry M. Reid briefs reporters. Behind him are Democratic Sens. Richard J. Durbin, left, Max Baucus and Patty Murray. (By Dennis Cook -- Associated Press)
By Jonathan Weisman
Washington Post Staff Writer
Friday, February 8, 2008

Congress gave overwhelming final approval last night to legislation that would send government payments to most American households and grant tax incentives for business investment, sending President Bush a $152 billion stimulus plan for the faltering U.S. economy.

The deal came yesterday after the Senate added low-income seniors and disabled veterans to the list of people who would receive money under a package previously approved by the House, then approved the bill, 81 to 16. The House took up and passed the Senate measure last night in a 380 to 34 vote, ensuring that checks would begin reaching recipients by mid-May.

Congress's action on the stimulus package reflected not only the growing concern in Washington that the nation has already slipped into a recession but also a desire to convince voters that the government is capable of responding quickly. It took just two weeks for House leaders from both parties to forge the initial deal with Bush, for the House to pass it overwhelmingly, for the Senate to amend it and for Congress to put its final stamp on the legislation.

"This is the Senate at its finest, recognizing this was an opportunity to demonstrate to the public that we could come together, do something important for the country and do it quickly," said Senate Minority Leader Mitch McConnell (R-Ky.). "We were able to put aside our differences not only in the Senate but with our colleagues in the House and with the administration."

Senate Majority Leader Harry M. Reid (D-Nev.) added: "It's tremendous what we've been able to accomplish."

Bush released a statement supporting the amended plan, saying it "is robust, broad-based, timely, and it will be effective. This bill will help to stimulate consumer spending and accelerate needed business investment."

The logjam broke quickly after Reid concluded yesterday morning that he could not find one more Republican vote to approve consideration of a more expensive plan crafted by the Senate. So, instead, the Senate added nearly $6 billion in benefits to the package fashioned by Bush, House Speaker Nancy Pelosi (D-Calif.) and House Minority Leader John A. Boehner (R-Ohio).

The legislation would provide $600 payments for individuals -- $1,200 for couples -- plus $300 for each child younger than 17. It would begin to phase out eligibility at $75,000 in adjusted gross income for individuals and at $150,000 for couples. Workers who can show $3,000 in earned income last year -- too little on which to pay income taxes -- would be eligible for payments of $300. The payments would be sent out separately from tax refunds.

Businesses would be given generous incentives to invest in new plants and equipment. The Federal Housing Administration and the federally backed mortgage consolidators Fannie Mae and Freddie Mac would be allowed to insure larger home mortgages.

On a 91 to 6 vote, the Senate added a provision to grant $300 payments to seniors, disabled veterans and veterans' widows who could show $3,000 in Social Security or veterans' disability benefits last year. Senators also tightened the rules to prevent illegal immigrants from claiming payments. In all, the payments would cost the Treasury $105.7 billion, all of which would be added to the budget deficit.

Senate Democrats had sought a considerably larger package that included an extension of unemployment insurance, billions of dollars in energy tax credits and federally backed bonds for home construction. It also would have ensured that low-income seniors, veterans and workers who earned too little to pay income tax would have received the same amount, $500, as working individuals. It would have doubled eligibility thresholds, to $150,000 for individuals and $300,000 for couples.

But when a GOP filibuster of that plan survived by a single vote, House Democratic leaders publicly pressured their Senate counterparts to scale back their ambitions and move fast.

"There is no reason for any more delay on this," Pelosi warned yesterday in a public break with Senate colleagues. "I don't think any change in the bill is really worth the delay."

Reid raised eyebrows last month when he promised final passage of a stimulus bill by the time Congress leaves for its Presidents' Day break on Feb. 15. Lawmakers beat the deadline by a week.

"The news is, we got there. We got there in record time," McConnell said.

The process nearly became a partisan brawl as Senate Democrats -- and some Republicans -- sought significant changes to the House plan over the past week. When those provisions were rejected on Wednesday, the Democratic Senatorial Campaign Committee immediately put out news releases accusing GOP Sens. McConnell, John E. Sununu (N.H.), John Cornyn (Tex.) and Roger Wicker (Miss.) of providing the decisive votes against the package. All face reelection battles in November.

Sen. Hillary Rodham Clinton (D-N.Y.) and the Democratic National Committee quickly criticized Sen. John McCain (Ariz.), the overwhelming favorite for the Republican presidential nomination, for sitting out that vote. McCain faced the difficult choice of siding with moderate Republicans in favor of the Senate package just before a high-stakes address to the GOP's conservative wing or voting with conservatives against a measure that has broad appeal.

"Sen. McCain already told us he doesn't understand the economy," Clinton spokesman Phil Singer said in a statement. "Now he's proven that he doesn't understand the economic struggles our middle-class families face as our economy slides into a recession."

McCain was present yesterday. He voted for the plan, which was opposed by 16 of his Republican colleagues, including conservatives he has been trying to woo. But this time, Clinton and Sen. Barack Obama (D-Ill.) were not in the chamber.

Reid had worked overnight to try to pick up a 60th vote, leaning hardest on Sen. George V. Voinovich (R-Ohio). But rank-and-file Democrats told their leaders yesterday that it was time to claim victory on the changes that the Republican leaders would accept, then start anew on another economic stimulus package that would pick up where this one left off -- by providing unemployment insurance extensions and heating assistance for the poor.

"We stood our ground. Seniors had been left by the side of the road by the president. We added veterans," said Sen. Claire McCaskill (D-Mo.). "It was time to declare victory and move on to the next stimulus package within only a few weeks."

Even after striking the final deal, Senate Democrats made it clear that they will let voters know which parts of their package were left on the cutting-room floor by GOP opposition.

"This is substance on the Senate floor, and people should be held accountable, pure and simple," said Sen. Charles E. Schumer (N.Y.), chairman of the Democratic Senatorial Campaign Committee.

Republicans were equally confident that the showdown will be forgotten as soon as the checks arrive.

© 2008 The Washington Post Company