House, Senate Diverge on Economic Aid

WASHINGTON (AP) -- The $150 billion economic aid package on a fast track to passage in the House faces an uncertain future in the Senate, where lawmakers in both parties are seeking to tack on billions for senior citizens and the unemployed.

The House planned a Tuesday afternoon vote on its plan to speed rebates of up to $600-$1,200 to most income earners while giving tax breaks to businesses.

A Senate panel was to vote Wednesday on a $156 billion version, which gives $500-$1,000 rebates to a broader group, including older Americans living off Social Security and wealthier taxpayers, and would extend unemployment benefits. Senate leaders hope to pass it by week's end, said Jim Manley, a spokesman for Majority Leader Harry Reid, D-Nev.

The action put the Senate on a collision course with President Bush, who has cautioned against adding to a carefully negotiated package that brought together House Democrats and Republicans, both of whom surrendered cherished proposals to reach a deal. The White House and congressional leaders agree it is critical to enact an economic recovery package as soon as possible to help head off a recession and boost consumer confidence.

"The Senate is threatening to create partisan conflict by trying to put in additional programs," said Tony Fratto, a White House spokesman.

In the Senate, though, Republicans were as eager as Democrats to revamp the plan. Several GOP senators backed the proposal to extend unemployment payments for 13 weeks for those whose benefits have run out, with 26 more weeks available in states with jobless rates higher than 6 percent. Some also have asked for more business tax breaks.

"Many of these additions have bipartisan support, and I hope that the president will recognize that the White House needs to negotiate with the Senate as well as the House," said Sen. Susan M. Collins, R-Maine, who backs both the rebates for seniors and the unemployment extension.

Sen. Olympia J. Snowe, R-Maine, a Finance Committee member, called the unemployment extension "critical" and said she supported ensuring that the rebates reached the elderly.

Under a plan unveiled Monday by Sen. Max Baucus, D-Mont., the Finance Committee chairman, some 20 million senior citizens not covered by the House plan because they don't have income would receive rebates.

"The White House says we mustn't slow the economic stimulus agreement down, or blow it up. I agree. We're going to improve it and get it passed right away," Baucus said.

Baucus' plan would send rebates to all Americans with earned income of $3,000 or more, while the House plan gives only partial rebates to individuals with adjusted gross incomes of more than $75,000 and couples with incomes in excess of $150,000, and no rebate at all to the wealthiest taxpayers.

It also restores a business tax break dropped during the House negotiations that would permit corporations suffering losses now to reclaim taxes previously paid.

© 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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