By Richard Wolf
Acting just three weeks after President Bush first proposed a $150 billion economic stimulus plan, the Senate added rebates for 20 million seniors and 250,000 disabled veterans to a package passed by the House last week. The new measure, adopted by the House Thursday night, is estimated to cost $168 billion over two years.
'This plan is robust, broad-based, timely, and it will be effective,' Bush said in a statement. 'This bill will help to stimulate consumer spending and accelerate needed business investment.'
The measure goes to Bush for his signature, which White House deputy press secretary Tony Fratto said will come next week. Treasury Secretary Henry Paulson said the Internal Revenue Service will get to work immediately, but it will take two to four months for the rebate checks to arrive.
Most single taxpayers will get $600 and couples $1,200, plus $300 for each child under 17. Anyone with at least $3,000 in earned income last year will get $300, as will seniors on Social Security, even if they paid no income taxes. The rebates phase out beginning at $75,000 in adjusted gross income for individuals, $150,000 for couples.
House Speaker Nancy Pelosi, D-Calif., said a 'typical' family of four with two children would get $1,800. 'I think that is impressive,' she said.
The original House bill had left out seniors, but senators insisted on adding them. Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, said seniors spend 92% of their income annually.
Barbara Kennelly, president of the National Committee to Preserve Social Security and Medicare, said, 'Seniors need the money, will spend the money and can contribute to this economic recovery effort.'
Senate Democrats were unsuccessful in adding other provisions that would have helped the unemployed, homeowners facing foreclosure and people struggling to pay heating bills. They vowed to include those and other provisions in a second measure later this year.
Despite disagreements over the additional items, Congress acted with unusual bipartisan spirit on the compromise measure, which also includes about $50 billion in business tax breaks as well as the rebates. Senate action Thursday came on an 81-16 vote; the House then voted 380-34.
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Mark Zandi, chief economist at Moody's Economy.com, said the package 'could make the difference between a short or long recession, or a mild to severe recession.'
The package represents a classic compromise, which the White House and Congress have seldom produced since Democrats won control last year. Democrats, led by Pelosi, insisted that rebates go even to low-income households that paid no income taxes last year. Republicans, led by House Minority Leader John Boehner, R-Ohio, insisted on a healthy dose of business tax breaks, such as accelerated depreciation.
Despite the bipartisanship, Sen. Charles Schumer, D-N.Y., warned Republicans could pay at the polls after blocking Democrats' attempt Wednesday to add about $40 billion in additional provisions. The Democratic Senatorial Campaign Committee criticized four GOP senators up for re-election.
'While it was substance that motivated our package, the political chips will fall where they may,' Schumer, who chairs the Democrats' campaign panel, said during the debate.