House Dems strike deal on economy; Senate not ready to accept

House Democrats gave up on increasing unemployment insurance and food stamps in an economic stimulus package announced Thursday in order to get Republicans to accept sending rebate checks to people who don’t pay income taxes.

The decision to make that deal with the Bush administration and House GOP leaders drew protests from Senate Democrats, who made clear  that they would revise the package when it arrived in their chamber.

{mosads}By the time House Speaker Nancy Pelosi (D-Calif.) stepped to the microphone at an early afternoon news conference, the proposal was already under attack. She defended her plan as the best way to speed money into the hands of consumers.

“Let us praise it for what it will do,” Pelosi said. “What it does is put money in the hands of working families.”

She said that other issues, such as Medicaid and unemployment spending, can still be addressed in future legislation.

“The Speaker gave some and the Republicans gave some,” said House Minority Leader John Boehner (R-Ohio). “This was not easy.”

Boehner praised the plan for its simplicity: “There’s three sections in this bill — two sections and a comma.”

The deal Pelosi and Boehner announced with Treasury Secretary Henry Paulson is built around $600 income tax rebates, with $1,200 going to married couples filing jointly, plus $300 per child.

Rebates of $300 will go to those who earned at least $3,000 last year but did not make enough to pay income taxes.

Pelosi said she hoped senators would respect the bipartisan work that went into the bill, and noted that Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) both said last week they would defer to the House.

But Senate leaders didn’t sound deferential.

“That is a good starting point, but it isn’t the end point,” Majority Whip Dick Durbin (D-Ill.) said of the House package.

Senate Democrats said they were concerned that the rebate checks wouldn’t stimulate the economy immediately. Instead, they planned to move their own bill next week that will be marked up by the Senate Finance Committee.

Senate Democratic leaders said they would try to include those provisions left out of the deal, which they say would have a more immediate impact on the economy: spending on infrastructure, food stamps and the extension of unemployment insurance.

“A stimulus that is just tax cuts and doesn’t do spending stimuli is incomplete,” said Sen. Charles Schumer (D-N.Y.), chairman of the Joint Economic Committee.

Bush urged both chambers to enact the package “as soon as possible.”

“This agreement was the result of intensive discussions, many phone calls, late-night meetings, and the kind of cooperation that some predicted was not possible here in Washington. It also required patience, determination, and good will on all sides,” Bush said.

Even though Republicans and the White House may be resistant to the add-ons, Senate Democrats doubted critics would block a stimulus package just as the economy is on the verge of a recession.

“Nobody wants to be responsible for holding up a stimulus bill,” Sen. Max Baucus (D-Mont.) said.

Reid said he expects the Senate to receive the bill from the House by Feb. 6, giving the two chambers less than 10 days to draft a compromise measure by Congress’s self-imposed deadline to send a bill to President Bush’s desk.

Reid said he couldn’t predict the total dollar amount of an economic stimulus package. But he added that the $150 billion figure being discussed by the White House and lawmakers is “not a magical figure.”

“When it comes over here, we’re going to take another look at it,” Reid said.

The House deal does not include extra spending Democrats had hoped to win on food stamps, unemployment insurance or public works projects, which Republicans consider a victory.

It does include a package of business incentives, including 50 percent bonus depreciation and increased expensing limits for small businesses.