Stimulus bill hits Senate this week
A bipartisan accord in the House calls for a $150 billion spending plan, including significant tax rebates. But senators may want add-ons.
Washington and New York
In a rare display of bipartisanship, Congress is on a fast track to approve a $150 billion spending package to boost a sluggish US economy.Skip to next paragraph
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It is the first of what are likely to be several stimulus plans put forward on Capitol Hill in coming months and the one most likely to become law.
With an election ahead in November, Republicans and Democrats are both under pressure to pass popular measures that reduce the risk or severity of a recession. That's why each side has made compromises, dropping controversial measures from the legislation to get a bill to President Bush by mid-February.
"We're doing our very best to maintain the bipartisan atmosphere that we have in the House," said Senate majority leader Harry Reid in a briefing last Thursday.
Even before the House votes on the deal, however, Senate committees are preparing this week to consider adding other elements, such as extending unemployment insurance, increasing food stamp programs and Medicaid payments to states, and reviving a $21.8 billion package of renewable-energy tax credits, which could boost employment in alternative-energy industries.
Support for adding elements to the bill is bipartisan, Senator Reid said. "We've had [Senate] Democrats and Republicans ask for certain things.... We have Republicans who are also concerned about extending unemployment benefits," he said.
Proposals that don't make this version of a stimulus plan could be taken up in a longer-term stimulus plan, he added. "That will come at a later time, but hopefully not too much later."
Tax rebates to help jolt the economy
The spending package hammered out last week by House leaders and Mr. Bush will add some pop to the sluggish US economy by the spring and may be enough to avert or end a recession.
The plan is relatively simple for individuals: a tax rebate – or "recovery rebate," as House Speaker Nancy Pelosi calls it – targeted at those who are likely to spend the money rather than save it. It will hit the economy at about the right time, say many economists of the bipartisan deal announced Thursday.
The tentative deal calls for giving $300 to $600 to an individual filer and up to $1,200 per family, plus $300 for each child. The rebates would be gradually phased out for individuals whose adjusted gross income exceeded $75,000 (or $150,000 for families). Small businesses would get a tax incentive to spend as well.
"It is no doubt positive for the economy," said Richard DeKaser, the Washington-based chief economist for National City Corp. in Cleveland. "It's a serious stimulus package, and I have little doubt its effect will be meaningful." The fiscal stimulus comes even as the Federal Reserve is aggressively dropping interest rates. The nation's central banker lowered rates by 0.75 percent on Jan. 22 and is expected to drop rates again on Wednesday.