Economic Stimulus Rebate Recalibrated

Senate Finance Committee alters proposal

By Kaye A. Thomas
Posted January 31, 2008
Updated January 31, 2008

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Some still object to changes.

As we noted yesterday, the version of the economic stimulus package offered by Max Baucus, D-Mont, chairman of the Senate Finance Committee, ran into some stiff headwinds. He negotiated some changes with Chuck Grassley, R-Iowa, the ranking member, and came up with a bill that received approval from a majority on the committee despite opposition from many Republicans. At this point it is unclear whether Republicans will attempt to block a Senate vote on the legislation approved by the Committee, or whether Democrats will find enough votes on the minority side of the aisle to overcome such opposition.

Key provisions

In broad outline, the Senate Finance Committee's version of the economic stimulus package is similar to the version approved by the House of Representatives, but with a few key differences.

  • The House version would provide most taxpayers with a rebate of up to $600 ($1,200 for couples). The Senate version would reduce that amount to $500 ($1,000 for couples).
  • People with at least $3,000 of earned income but not enough income to pay income tax would receive $300 under the House version but $500 under the Senate version.
  • The Senate version would provide rebates to millions of low-income people who would not receive rebates under the House version, primarily senior citizens on Social Security and disabled veterans.
  • The House version would phase out beginning with income above $75,000, or $150,000 for couples. The version proposed by Baucus would have removed the income cap, but in response to criticism from fellow Democrats the version approved by the Senate Finance Committee includes an income cap at double the levels set in the House version ($150,000 for individuals, $300,000 for couples).
  • The Senate version includes a provision intended to prevent illegal aliens from receiving rebate checks.
  • The Senate version includes an extension of unemployment benefits. House Democrats had wanted to include such a provision but dropped it in a compromise with Republicans.

Both the House and Senate versions of this legislation include business tax incentives as well, and there are some differences in the two versions in this regard as well.

Update

Published reports late in the day indicate final votes in the Senate may not occur until February 6, the day after the Super Tuesday primaries, so the presidential candidates can be present for votes that are expected to be close.

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