Senate snags stimulus

An economic stimulus bill was approved with overwhelming support in the House Tuesday, but faced an uncertain path in the Senate, where tinkering by lawmakers threatens the legislation.

Key congressional leaders urged the Senate to take up the bipartisan stimulus package the House approved 385-35, warning senators they could delay help to the economy that President Bush said was badly needed during his State of the Union address.

{mosads}“It would be best for the Senate to take up the House-passed bill and send it to the president for his signature,” Senate Minority Leader Mitch McConnell (R-Ky.) told reporters. “This is not the time to get into some testing of wills between the two congressional bodies.”

At issue is a plan offered by Senate Finance Committee Chairman Max Baucus (D-Mont.) that will be marked up by his panel on Wednesday.

Baucus wants to significantly broaden the House-passed legislation—which reflects a deal struck between Bush and House leaders—by extending unemployment insurance, boosting the size of the rebates for those paying the least taxes, and granting them to more people, including senior citizens who don’t pay taxes and the wealthy.

Most controversial for Democrats is Baucus’s proposal to lift the income caps in the House-passed legislation, which would phase out tax rebates for individuals with incomes greater than $75,000 or couples whose joint income exceeds $150,000.

Senate Majority Leader Harry Reid (D-Nev.) and Sen. Jay Rockefeller (D-W.Va.), a senior member of the Finance Committee, both said this idea was roundly criticized at the Senate Democratic weekly luncheon. Reid said he was “totally opposed to it” and that removing the caps “causes me to want to gag.”

“I think Warren Buffett should not have that rebate,” Reid told reporters. “I think it would be ill advised. Senator Baucus heard from plenty of people in our caucus today. He understands that.”{mospagebreak}

Republican senators echoed McConnell, calling for the Senate to move forward with the House-passed bill and warning that the measure risked being overloaded. “If you start adding, it’s hard to stop adding” said Sen. Lamar Alexander (R-Tenn.).

However, even some Republicans, including Sens. Olympia Snowe (Maine) and John Sununu (N.H.), who both sit on Finance, are calling for additions to the House bill, such as the extension of unemployment benefits.

{mosads}McConnell stopped short of saying that Senate Republicans would unite behind the House bill.  “A significant majority of my caucus thinks that Speaker [Nancy] Pelosi [D-Calif.] and [Minority] Leader [John] Boehner [R-Ohio] did a pretty good job,” he said.

Sen. Dick Durbin (D-Ill.) sought to calm fears that the Senate would derail the stimulus deal, reminding reporters that Baucus’s proposal to lift income caps was an effort to gain GOP support. “We have to find out what has bipartisan support,” Durbin said. “And the reason he took the caps off was to build bipartisan support. So let’s see what happens.”

Baucus defended his proposal, predicting the full Senate would approve the package and arguing that overall it is still simpler than the House bill. He warned his colleagues not to add other provisions, notwithstanding his own tweaking of the House legislation.

“The real question is the degree to which other provisions are added, frankly,” he said. “I do not want it loaded up with lots of other provisions.”

Under the House plan, rebates of $300 to $1,200 would go to millions of lower and middle-income taxpayers, as well as to workers who aren’t on the income tax roles. Baucus would grant $500 rebates for people who report at least $3,000 in income, including Social Security payments. {mospagebreak}

After the House vote, Pelosi and  Boehner urged the Senate to consider their bill as written.

Pelosi argued that other proposals could be enacted later, though she has never committed to a second stimulus bill.

 {mosads}“It’s not unprecedented for one chamber to yield to the bill of the other,” Pelosi said, citing occasions last year when the House passed Senate versions of bills with no changes, partly because GOP opposition in the Senate prevented House bills from moving forward.

“I hope the Senate will return the favor and take our bill and run with it,” she added.

House members have been frustrated with their party’s Senate leaders and the ability of the Senate GOP minority to stall legislation, and Ways and Means Committee Chairman Charles Rangel (D-N.Y.) did not bother to hide his disdain for the Senate in comments to a business group Tuesday morning. “Our poor Democratic leadership,” he said, referring to Senate leaders. “They’re held hostage. Sometimes I think they like it because they sure do like each other.”

Pelosi and Boehner said that they like many proposals floating around to stimulate the economy, but warned that reopening the debate would slow the package.

“The American people are expecting a rebate check. The Speaker and I have been through this process,” said Boehner, who added that he and Pelosi had received “hundreds of letters” from lobbyists pushing the gamut of measures to add to the stimulus. “They are all good ideas, but they don’t meet the need of being timely.”

However, it may be too late to put the genie back in the bottle.   

On the Finance Committee, Sen. Maria Cantwell (D-Wash.) said she may offer an amendment on green energy tax incentives and Sen. Ron Wyden (D-Ore.) says that a bipartisan group of 20 senators support a provision he has co-sponsored with Sen. John Thune (R-S.D.) to direct that a portion of the stimulus bill be spent on road resurfacing.

“I share the desire of all the leaders to do this quickly,” Wyden said. “But I still have an obligation as a U.S. senator to wring every possible benefit out of the stimulus dollar.”

Ten House Democrats voted against the package, including some centrists who rejected the Alternative Minimum Tax fix last year because it, like the stimulus bill, was not paid for with budgetary offsets. They included Reps. Brian Baird (Wash.), Marion Berry (Ark.); Allen Boyd (Fla.); Jim Cooper (Tenn.), Collin Peterson (Minn.), Loretta Sanchez (Calif.), Adam Smith (Wash.) and Gene Taylor (Miss.).

Manu Raju contributed to this article.