The Stimulus Problem
January 29, 2008
As the House passed a bipartisan economic stimulus package – “a $146 billion shot in the arm for the nation’s ailing economy” – the Senate was busy putting together its own version. The problem? The House and the Bush administration fear that if the Senate doesn’t pass the legislation quickly, without changes, it will get stalled and come too late, or will come with provisions that the House and/or the President will not be willing to approve. House Speaker Nancy Pelosi (D-California) voiced her concern by saying, “If we heap too much on top of the package, it will then take us deeply into debt. I think it’s a good day for us here. Let’s hope the Senate takes our lead from us” (Washington Post).
The House stimulus package includes a $600 tax rebate for most workers ($1200 for married couples) plus an additional $300 per child. The rebate would go to individuals who make $75,000 or less ($150,000 combined for married couples). Anyone who made $3000 or more, but not enough to pay taxes, would receive $300 plus $300 per child. Businesses would also get a break in the form of “$45 billion in tax incentives to invest in new plants and equipment.” As for the housing market, considered to be the heart of the economic slump, $500 million would go toward foreclosure mitigation counseling. There would also be an allowance for Fannie Mae and Freddie Mac (federally-backed mortgage consolidators) to insure larger mortgages. The House passed the measure 385-35, sending it to the Senate.
The Senate’s own stimulus package is being put together by the Senate Finance Committee, chaired by Senator Max Baucus (D-Montana). This version cuts the rebate checks to $500 per individual, but makes it available to practically everyone in the country, including low-income senior citizens as well as removing the $75,000/$150,000 income cap. It also extends unemployment benefits by 13 weeks. This version has angered leadership in both houses, however: “To take off the [income] caps causes me to want to gag,” said Senate Majority Leader Harry Reid.
The likely course of action in the Senate is that the House version will be brought up, then Baucus’ version presented as a substitute. Senate Minority Leader Mitch McConnell (R-Kentucky), however, wants the Senate to vote on the House version and send it to the President before the end of the week. He is trying to convince his fellow Republicans to oppose the Finance Committee’s version in favor of the House version: “I can safely say that a significant majority of my conference thinks that Speaker Pelosi and Congressman Boehner did a pretty good job and are persuaded that this is one of those rare instances in which we ought to rise above ourselves and do something quickly.”
There seems to be a lack of consensus, however, with both Republicans and Democrats in the Senate seeking to add their own provisions to the package.
