House OKs tax rebates
Published: Thursday, January 31, 2008 at 6:01 a.m.
Last Modified: Wednesday, January 30, 2008 at 4:44 p.m.
It didn’t take long to burst the bubble of consensus around speeding rebates to working Americans.
As the House voted overwhelmingly Tuesday to rush $600-$1,200 checks to most taxpayers, a partisan confrontation loomed in the Senate over Democrats’ efforts to add jobless aid and help for the poor.
The disagreement threatened to sap momentum from a $161 billion economic recovery package that was enjoying an uncommonly smooth and swift ride through Congress. The House passed that bill 385-35 on Tuesday, but the wide margin belied obstacles in the unruly Senate, where Democrats and some Republicans want to swell the measure with add-ons.
Sen. Max Baucus, the Finance Committee chairman, planned a Wednesday vote in his panel on a $196 billion package that adds $35 billion for senior citizens and the unemployed, and shrinks the rebate to $500 for individuals and $1,000 for couples. It would deliver checks even to the richest taxpayers, who are disqualified under the House-passed measure.
President Bush and House leaders urged the Senate to take the bipartisan agreement and pass it quickly.
‘‘The temptation is going to be for the Senate to load it up,’’ Bush said in the Oval Office. ‘‘My concern is that we need to get this bill out of the Senate and on my desk.’’
Congressional leaders are aiming to send the package to Bush by Feb. 15. The goal was to start mailing out rebate checks in May and to have most of them to taxpayers by July so that people would spend the money and kick-start a slumping economy. But the divergent plans — and bids by Senate Democrats and some Republicans to enlarge the package with more add-ons — could drag out that schedule.
House Speaker Nancy Pelosi, D-Calif., said she hoped the Senate would ‘‘take this bill and run with it.’’
Senate Majority Leader Harry Reid, D-Nev., said that was unlikely in the freewheeling Senate, where members in both parties have elaborate wish-lists for adding to the bill, including food stamps, Medicaid and heating assistance for low-income people and spending on infrastructure projects, among other things.
The House measure would send rebates to most income earners, including roughly 35 million families who don’t make enough to pay income taxes. Individuals with adjusted gross income of $75,000 and couples making $150,000 would get rebates equal to the taxes they paid, up to $600 for individuals and $1,200 for couples. Those making more than that would see their rebate go down by $50 for each $1,000 of income over the limits.
All eligible people would get at least $300 — or $600 for couples. They would get an additional $300 per child.
In the Senate, Baucus’ proposal removes the income caps and would send rebates to some 29 million senior citizens not covered by the House plan because they don’t have income. It would send $500 per individual and $1,000 per couple to anyone earning more than $3,000, regardless of their income or how much taxes they owed.
Baucus’ measure also extends unemployment payments for 13 weeks for those whose benefits have run out, with 26 more weeks available in states with a 6.5 percent jobless rate or higher.
The Senate plan would restore a business tax break dropped during the House negotiations that would permit corporations suffering losses now to reclaim taxes previously paid.
Both packages include roughly $50 billion worth of tax incentives for businesses to invest in new plants and equipment.
Baucus said he, too, wanted to avoid burdening his proposal with extras.
To address the mortgage crisis, the House bill would raise the limit on Federal Housing Administration loans from $362,790 to as high as $729,750 in expensive areas, allowing more subprime mortgage holders to refinance into federally insured loans.
To widen the availability of mortgages nationwide, it also would boost the cap on loans that Fannie Mae and Freddie Mac can buy, from $417,000 up to $729,750 in high-cost markets. Those measures would expire at the end of the year.
Sen. Charles Schumer, D-N.Y, said Tuesday that he plans to ensure the housing provisions are part of the Senate stimulus bill.
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