WASHINGTON (Reuters) - The Congress passed a nearly $152 billion plan on Thursday to stave off an election-year recession by sending government rebate checks to millions of Americans and providing business tax incentives to boost spending.
Moving quickly to get the economic package to President George W. Bush, the House of Representatives passed the bill by 380-34, just hours after the Senate cleared the measure on a vote of 81-16. Bush is expected to sign the bill next week.
The legislation will provide one-time rebates of up to $600 for individuals or $1,200 for couples, plus $300 for each child. Low-income people, including retirees on Social Security and disabled veterans who pay no income taxes, would receive checks of $300. The rebates would start to phase out for people with taxable incomes of more than $75,000 for individuals and $150,000 for couples.
At a news conference with congressional leaders, Treasury Secretary Henry Paulson said the rebate checks would go to more than 130 million Americans. "We're going to have the checks out beginning of May and this is largely going to be done by the time summer's over," he added.
Bush praised the final package.
"This plan is robust, broad-based, timely, and it will be effective," he said in a statement. "This bill will help to stimulate consumer spending and accelerate needed business investment."
The final bill was broader than the original House-passed package backed by Bush. The Senate added the elderly and disabled veterans who had been left out of the House bill. To win more Republican support in the closely divided Senate, Democrats had to drop demands for benefits for long-term unemployed workers and other provisions that would have helped low-income people pay heating bills and home builders write off current year losses against previous tax years.
The Senate also added language to help ensure illegal immigrants did not receive rebate checks.
The bill will inject nearly $152 billion into the economy this year and more than $16 billion next year.
UNUSUAL SPEED
With all 435 members of the House and one-third of the 100-member Senate up for re-election in November, the legislation moved through Congress with unusual speed and rare cooperation between the two parties.
Senate Majority Leader Harry Reid, a Nevada Democrat, said the stimulus package approved by the Senate would "change the economic direction of this country" and added lawmakers likely would do more this year to stimulate the economy.
The latest economic data suggest the U.S. economy is stalling. Pending sales of previously owned homes fell by 1.5 percent in December and were off a sharp 24 percent from a year ago, the National Association of Realtors said on Thursday.
At the same time, the Labor Department said the number of workers drawing jobless benefits had hit a 2-1/4-year high and major retailers reported a slowdown in consumer spending.
Lawmakers hope the rebate checks and incentives for business investments will send Americans on a shopping spree that will help jump-start the economy.
The bill also provides for higher loan limits for the Federal Housing Administration insurance program and mortgage financing giants Fannie Mae and Freddie Mac to help lift the sagging housing market.
Even as Congress acted on the bill, some lawmakers were discussing a possible second package to help the economy.
Senate Finance Committee Chairman Max Baucus, a Montana Democrat, said Congress would move more stimulus legislation "if the economy continues to go south, if there are significant increases in foreclosures and bankruptcies and so forth."
Reid said Republican opposition to expanded unemployment benefits and aid to low-income families for paying winter heating bills would haunt them in the November elections.
"They are following this president right off a cliff," Reid said.
Senate Republican Leader Mitch McConnell of Kentucky said the economic package transcended politics.
"This is not a victory for Republicans or Democrats. This is a victory for the American people," McConnell said.
Reid and other Democratic senators said they would try to move legislation later this year expanding unemployment benefits and helping the housing industry.
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