WASHINGTON (Reuters) - The White House on Tuesday opened the door to expanding an economic stimulus plan to revive the ailing U.S. economy when a top official offered to extend a tax rebate to some 20 million retirees and disabled veterans.
"We recognize the difficulties that low-income seniors and veterans are facing and I'm sure we will be able to work something out, get something quickly done that is broad-based," Treasury Secretary Henry Paulson told the Senate Finance Committee.
The two groups were been included in a bill passed by the House of Representatives, with White House backing, meant to jolt the economy and fend off a slide into recession.
But Paulson said the administration opposed some provisions in a parallel bill passed by the Senate Finance Committee last week, which included extra unemployment benefits and tax credits for some renewable energy resources.
That bill did extend rebates to retirees on Social Security and disabled veterans.
Three senators running for president -- Republican John McCain of Arizona and Democrats Hillary Clinton of New York and Barack Obama of Illinois -- arranged to return to Washington on Wednesday as the Senate prepared for a showdown vote later in the day on the Finance Committee bill.
Sixty votes would be needed in the 100-member Senate to move to end debate and head toward passage of the measure. It was uncertain if backers could muster that much support -- or what would happen next if they failed to do so.
The White House had been pushing for quick passage of the House bill that Paulson negotiated with House Democratic and Republican leaders. Lawmakers are under increasing pressure from retirees and home builders to accept the Senate Finance Committee version.
CASH FOR FAMILIES, BUSINESS TAX BREAKS
The $146 billion House bill would give individuals a one-time $600 payment and couples $1,200 plus $300 per child. The tax rebates would begin phasing out for individuals earning more than $75,000 and married couples making over $150,000.
The $157 billion Senate Finance Committee bill would allow for $500 and $1,000 payments, respectively, but with higher income caps.
Both the House and Senate measures would provide tax breaks for businesses to encourage new purchases in plant and equipment, but the Senate bill would also allow businesses to write off more of their current losses against previous tax years. That would help home builders hit by the housing slump and subprime mortgage crisis.
Senate Majority Leader Harry Reid, a Nevada Democrat, had intended to offer a more expansive measure than the House bill. Senate Republican Leader Mitch McConnell of Kentucky is offering another version that would include retirees and veterans in the House-passed bill.
Reid's proposal would build on the Finance Committee bill and include provisions from the House bill that would allow the Federal Housing Administration, as well as housing finance giants Fannie Mae and Freddie Mac, to back larger loans.
Reid said he also planned to include about $1 billion to help low-income Americans heat their homes through the Low Income Home Energy Assistance Program, a provision that could win support from Northern Republicans.
Sen. Charles Grassley of Iowa, the top Republican on the Senate Finance Committee, said in an interview at the annual Reuters Regulation Summit that Reid's proposal could pass the House if it wins the 60 votes needed in the 100-member Senate to advance controversial legislation.
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