WASHINGTON—The U.S. Senate Finance Committee approved a $157 billion economic stimulus package on Wednesday that offers smaller tax rebates to more people than a plan passed by the U.S. House of Representatives.
The committee approved the bill as the full Senate prepared to begin debate as early as Thursday on competing versions of an economic stimulus plan lawmakers hope will encourage consumer and business spending to help stave off an election-year recession.
President George W. Bush wants the Senate to accept the $146 billion package passed Tuesday by the House. Senate Minority Leader Mitch McConnell of Kentucky has been pushing his fellow Republicans to reject the Senate Finance Committee bill and support the House version to avoid delays on issuing the rebate checks.
The Finance Committee bill, approved on a vote of 14-7, would provide a flat $500 tax rebate to individuals and $1,000 for couples, plus $300 per child. The rebates also would go to about 20 million low-income retirees on Social Security who would not receive checks under the $146 billion House stimulus bill.
"I've worked hard with my colleagues to improve on the House stimulus proposal and move a bill quickly," Finance Committee Chairman Max Baucus, a Montana Democrat, said. "Congress should seize with both hands this chance to make 20 million American seniors a part of our economic stimulus efforts today, and get our country growing again."
The House bill calls for rebates of up to $600 for individuals and $1,200 for married couples, plus $300 per child. The rebates would begin phasing out for individuals with more than $75,000 in taxable income and married couples with more than $150,000.
The Finance Committee bill would give a flat $500 rebate to individuals, $1,000 for couples, plus $300 per child to all tax filers reporting at least $3,000 of income, including Social Security and disability benefits.
The House bill provides for a $300 rebate for low-income workers, $600 for families who reported at least $3,000 in income in 2007 and paid no income taxes. Those families would also get the $300 child benefit.
The Finance Committee bill would also make more higher-income people eligible by doubling the income when phase-out begins to $150,000 for individuals and $300,000 for married couples.
A downturn in the housing market, a subprime mortgage crisis, tightening credit markets and rising oil prices have lawmakers and some economists worried that the U.S. economy could slip into a recession.
Economic growth slowed abruptly to 0.6 percent in the fourth quarter last year, following a surge of 4.9 percent in the third quarter, the U.S. government said on Wednesday.
The Finance Committee added a number of measures not included in the House bill, including nearly $6 billion in tax benefits for renewal energy resources. The bill would extend unemployment benefits beyond the 26 weeks offered by most states. Bush and many of his fellow Republicans oppose extending unemployment benefits.
The committee also agreed to an amendment that temporarily raises by $10 billion the amount of tax-exempt mortgage revenue bonds that states can offer to help fund low-income housing and low interest mortgages to help some homeowners facing foreclosure refinance their loans.
Like the House bill, the Finance Committee measure includes business incentives for new purchases. But it goes further by allowing companies to write off more of their losses against previous tax years.
The committee bill would cost the federal treasury about $157 billion this year and nearly $36 billion next year, but last minute additions to the bill could change that number.