Senate Panel Unveils Plan of Its Own on Economy

By David M. Herszenhorn
The New York Times

Tuesday 29 January 2008

Washington - 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 on Monday. The plan would pay $500 to most individual tax filers and $1,000 to couples, with an additional $300 a child for families, with 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, Representative John A. Boehner of Ohio, but there are differences over how much more. The Senate has not released the cost of the plan's components, nor does it estimate the cost beyond 2008.

House officials now say their plan, to be voted on Tuesday, would cost $145.9 billion in 2008. 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. The aides predicted that the true cost of the Senate plan would be more than $156 billion, potentially derailing efforts by the White House and Congressional leaders to aid 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 proposal. 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 under current law, at a cost of about $12.5 billion. The House would not extend unemployment payments.

Like the House plan, the Senate proposal contains several tax breaks for businesses, including an increase in the amount of expenses that small businesses can immediately write off. But the Senate added another incentive, allowing businesses to deduct losses from up to five years ago. Current law allows losses to 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.

Senator Max Baucus, Democrat of Montana and chairman of the Finance Committee, who unveiled the plan, said it would be discussed Wednesday. The plan does not include initiatives like spending on infrastructure, energy tax credits or an increase in food stamps that other senators may try to add. The majority leader, Senator Harry Reid of Nevada, has said he intends to bring the proposal to the floor for a vote as soon as possible, perhaps Wednesday or Thursday.

The Senate would have to reconcile its stimulus bill with the measure the House is likely to approve Tuesday, requiring additional work and votes, before a final version could be sent to the White House.

In his State of the Union address on Monday, Mr. Bush repeated his warning against complicating the House plan. "The temptation will be to load up the bill," he said. "That would delay it or derail it, and neither option is acceptable. This is a good agreement that will keep our economy growing and our people working. And this Congress must pass it as soon as possible."

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."

The Senate plan does not include the proposal by the House to increase the limits on "conforming" mortgages that can be bought by Fannie Mae and Freddie Mac, or insured by the Federal Housing Administration.

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