Congress and the economy: After stimulus bill, what next?

Congress is likely to try other economic boosts. The GOP wants to extend the Bush tax cuts set to expire in 2010.

from the February 11, 2008 edition

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Negotiations on a plan began in the House, where Democratic leaders convinced the White House to expand eligibility for checks to some 35 million working families who made too little to pay income taxes – and phase out those with adjusted gross incomes of $75,000 for individuals and $150,000 for married couples.

"For the first time, tens of millions of low-income working people, who have been excluded from past stimulus laws, will benefit from recovery rebates and the child tax credit," said House Speaker Nancy Pelosi in a statement Thursday.

The first draft of a stimulus plan, announced Jan. 24, passed the House but appeared to bog down in the Senate. Senate Democrats, backed by eight Republicans, tried to add $43 billion in additional spending, including extended unemployment benefits, alternative-energy tax credits, home-heating subsidies for low-income households, public works projects, and more support for nutrition programs. But they fell one vote short in a vote Wednesday.

At the request of Senate majority leader Harry Reid, Sens. Hillary Rodham Clinton (D) of New York and Barack Obama (D) of Illinois came off the presidential campaign trail to return to Washington to vote for the measure. Sen. John McCain (R) of Arizona, the leading GOP contender, was the lone Senate absentee.

The battle for the final Republican vote went on until Senator Reid agreed to allow a GOP amendment to the bill, which added 20 million seniors and 250,000 disabled veterans to those receiving rebates under the House plan. They also voted to close a loophole that critics said could have allowed checks for those working in the US illegally.

"I've been home quite a bit lately and that's what people have been talking about: seniors, veterans, and immigration. That was the glue that kept this deal together," says Sen. Ted Stevens (R) of Alaska, who drafted the GOP amendment.

Democrats and outside groups lobbied a handful of GOP senators in a bid to tip the vote toward a larger stimulus bill. The AARP, the largest lobby for people over 50, ran full-page ads on the theme: "Millions of people are watching how their Senators vote on Economic Stimulus – no pressure."

Now, lawmakers in both parties say Congress must take up longer-term measures to revive the US economy. Republicans are urging permanent extension of the Bush tax cuts set to expire in 2010.

"While this measure should help get our economy moving in the short term, it should be just the beginning of our efforts to improve our economic competitiveness over the long term," said House GOP leader John Boehner, after the vote.

Democrats are gearing up for a wide-ranging second stimulus plan, which could include a debate over the tax code. In the Democratic Radio Address Saturday, Rep. Charles Rangel (D) of New York called the stimulus bill "a good first step." But the chairman of the House Ways and Means Committee also called for a more equitable tax code.

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