Economic stimulus package clears House, faces Senate hurdle

-- The House approved a $146 billion economic stimulus package Tuesday afternoon by a wide, bipartisan margin, but the package had an uncertain future in the Senate.

Maine Republican Sen. Susan Collins says the president needs to negotiate with the Senate.

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The vote was 385-35, with one representative voting present. The bill needed two-thirds of the voting members to pass.

The bill calls for one-time tax rebates to go primarily to individuals making less than $75,000 and to married couples making less than $150,000.

It would also provide temporary tax breaks that would let businesses deduct more of their investments in plants and equipment more quickly, and it contains two measures aimed at helping homeowners get or refinance mortgages.

"Many Americans in the middle class are living paycheck to paycheck," House Speaker Nancy Pelosi told reporters after the vote.

"They have a struggle with the rising cost of groceries, gasoline and health care. The list goes on. Today, Congress acted in a way that is directly relevant to their lives, and we hope the Senate will follow suit."

Before the vote, Pelosi warned the Senate not to do anything that would slow down final passage of the bill, which was a compromise worked out between the White House and House leaders.

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"I don't want anything that's done in the Senate, as much as I would support many of those initiatives, to do any harm to what we have done in our rebate package," the California Democrat said.

But that did not mean she opposes any tinkering, as long as it does not add substantially to the overall cost, Pelosi said, adding: "If they can come to agreement in a bipartisan way and with the administration on some additions to that, we're happy to look at that as we reconcile the two bills." Read how the presidential candidates reacted to the plan »

House Republican Leader John Boehner of Ohio sidestepped questions about the prospects for the stimulus if the Senate were to add to it, saying, "I think the House has got a very good package. I'm hopeful that we'll get a strong bipartisan vote today, and I'm hopeful, at the end of the day, that's the package that becomes law."

Congress and the White House both agree the economy needs a quick shot in the arm.

The proposed package includes tax rebates and tax incentives for businesses. See who would benefit under the proposal »

The Senate Finance Committee is to vote Wednesday on its version of the stimulus package, according to Sen. Harry Reid, D-Nevada.

That means Senate action on the bill could begin this week, depending on how much progress is made on the Foreign Intelligence Surveillance Act bill, which is stalled by thorny procedural disputes, a Senate Democratic leadership aide said.

Democratic consensus has built around a plan offered by Finance Committee Chairman Max Baucus to provide a rebate check to about 20 million Social Security recipients who would get nothing under the House plan. The Baucus plan would also extend unemployment benefits.

His proposed package would give $500 to any American with $3,000 in qualifying income to report on a 2007 tax return, including tens of millions of seniors living on Social Security.

Married couples filing jointly would get $1,000, and families would receive an additional $300 per child under age 17.

The plan also extends by 13 weeks federal unemployment insurance benefits, with more for workers in states with high unemployment.

Businesses losing money would be able to write off losses retroactively for as many as five years.

The package is expected to cost approximately $156 billion.

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

But Senate Republican leader Mitch McConnell of Kentucky called on the Senate to pass the House bill without amendment, saying that would be the quickest way to stimulate the economy and avoid a test of wills between the House and Senate. A GOP leadership aide said Republicans would filibuster efforts to amend the House bill, which could lead to a long delay in passing a bill.

There also was disagreement over the Baucus proposal's lack of upper-income limits for rebate eligibility, with some senators saying billionaires like Bill Gates and Warren Buffett ought not get checks.

Still, Baucus described his bill as "quite an improvement" over the House version. He said removing the income caps is "clean and simple," while the House-passed bill is "extremely complicated."

Baucus predicted the bill would attract the 60 votes needed for passage, and said it could be finalized and signed by February 15.

Despite that prediction, criticism was voiced even from the Democratic side. "Common sense has left the building," said Sen. Byron Dorgan, D-North Dakota.

That said, Baucus said there is a chance the caps could be put back into the bill when they go to conference to meld together the Senate and House bills.