(CBS/AP) The fate of $600-$1,200 rebate checks for more than 100 million Americans is in limbo after Senate Democrats failed Wednesday to add $44 billion in help for the elderly, disabled veterans, the unemployed and big business to the House-passed economic aid package.
Republicans banded together to block the $205 billion plan from advancing Wednesday, leaving Democrats with a difficult choice either to quickly accept a House bill they have said is inadequate or risk being blamed for delaying a measure designed as a swift shot in the arm for the lagging economy.
The tally was 58-41 to end debate on the Senate measure, just short of the 60 votes Democrats would have needed to scale procedural hurdles and move the bill to a final vote. In a suspenseful showdown vote that capped days of partisan infighting and procedural jockeying, eight Republicans - four of them up for re-election this year - joined Democrats to back the plan, bucking GOP leaders and President Bush, who objected to the costly add-ons.
Democrats choreographed the vote for maximum political advantage, presenting their aid proposal as a take-it-or-leave-it proposition for Republicans and calling back their presidential candidates to make a show of party unity behind their stimulus plan. They calculated that Republicans would pay a steep price for opposing rebates for older Americans and disabled veterans, as well as heating aid for the poor, unemployment benefits and a much larger collection of business tax breaks than the House approved.
"There was a chance on the table to help low-income seniors and disabled veterans and Americans looking for work, and the Senate frankly blew it tonight," Sen. Max Baucus, D-Mont., said in a statement after the vote.
Republicans, though, said they were ready to accept rebates for seniors and disabled veterans and accused Democrats of delaying the stimulus plan for political gain and loading it down with special-interest extras.
"Our constituents will look at us as the folks that slowed it down (and) added a bunch of spending to it," said Sen. Jon Kyl of Arizona, the Republican whip, who called the measure "a Christmas tree package."
Democratic presidential candidates Hillary Clinton of New York and Barack Obama of Illinois flew to Washington for the vote. Clinton and Obama voted yes on the measure; GOP front-runner John McCain did not vote, reports CBS Radio News' John Hartge.
Supporters actually had 59 votes in favor of the Democratic proposal, but Majority Leader Harry Reid of Nevada switched his vote to 'no' at the last moment, a parliamentary move that allows him to bring the measure up for a revote.
Republican leaders objected to add-ons such as a $14.5 billion unemployment extension for those whose benefits have run out, $1 billion in heating aid for the poor and tax breaks for renewable energy producers and coal companies.
The measure builds upon a $161 billion House-passed bill providing $600-$1,200 checks to most taxpayers and tax breaks to businesses investing in new plants and equipment.
The Senate version would provide checks of $500-$1,000 to a broader group that includes 20 million elderly people, 250,000 disabled veterans and taxpayers making up to $150,000 for singles - or $300,000 for couples.
It would extend unemployment benefits for an additional 13 weeks for those whose benefits have run out, with 13 more weeks available in states with the highest jobless rates. The bill also includes $10 billion in tax-free mortgage revenue bonds to help homeowners refinance subprime loans.
Reid denied Republicans an opportunity to offer changes to the measure, provoking the filibuster. The calculus was that enough Republicans would relent in the face of political pressure to support unemployment insurance and heating aid to join Democrats and force the measure through.
GOP leader Mitch McConnell, R-Ky., said he wants to amend the measure to add rebates for disabled veterans and their widows and the elderly, and language - also included in the Democrats' package
making clear that illegal immigrants can't get rebate checks.
Reid rejected the offer - at least for the time being - but Republicans seemed confident he would eventually agree to comparable changes since the alternative would be to approve the House bill and leave retirees living on Social Security and disabled veterans without rebate checks.
The climactic vote came after an intense lobbying effort by Democrats to convert wavering Republicans, including those facing tough re-election fights. Their efforts got a boost from outside groups leaning on senators to back the package, including home builders, manufacturers and the powerful seniors lobby.
Republicans were under enormous pressure from their own leaders not to support the Democrats' plan. Working to stem defections, GOP leaders assured their rank and file that they would have another chance to support adding senior citizens and disabled veterans to the aid plan even if they opposed the Democrats' bill.
That wasn't enough for Sen. Pete Domenici, R-N.M. who threw his support behind the measure.
"I'm hopeful that I have chosen the right path," he said just before the vote. "I made my decision on what was best for New Mexico and what's best for America."
But other targets, such as Sen. John Sununu, R-N.H., stuck with McConnell.
Asked Tuesday whether the administration would accept adding rebates for the elderly and disabled veterans to the stimulus measure, Treasury Secretary Henry Paulson declined to say definitively, but he told the Finance Committee, "I'm sure we'll be able to work something out and get something quickly done that's broad-based."
The dispute has slowed down the stimulus measure, but there's no indication that it will delay rebate checks, which are expected to begin arriving in May. The rebates will be based on 2007 tax returns, which aren't due until April 15.
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