House OKs $146B economic aid bill

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House OKs $146B economic aid bill


Fast-track measure would offer cash rebates to consumers in big to juice growth. Fate of package in Senate uncertain.


NEW YORK (CNNMoney.com) -- The House voted overwhelmingly Tuesday to approve an estimated $146 billion stimulus package aimed at countering the slowdown in economic growth.
The legislation, which House leaders brokered last week after intensive talks with the Bush administration, faces an uphill battle in the Senate.
A number of senators have said they want to amend the plan. Both chambers have sent out flares indicating there will be hard-headed negotiating ahead. The battle is likely to be conducted at high speed since lawmakers say they want a stimulus package delivered for the president's signature by mid-February.
The House 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 for businesses that would let them deduct more of their investments in plants and equipment more quickly. And it contains two measures aimed at helping homeowners get or refinance mortgages.
The Senate proposal is still "conceptual" in nature, according to a spokesperson for Senate Finance Committee Chairman Max Baucus, D-Mont. It differs in several key ways from the House plan.
Rebates would be smaller but go to more people. The Senate proposal would offer rebates to seniors whose primary income comes from Social Security. Under the House bill, rebates would go only to households with earned income.
The Senate rebate would be slightly less for most of the people who would qualify for a rebate under the House plan. For example, a married couple filing jointly who make enough to be in at least the 15 percent tax bracket would get $1,000 under the Senate proposal versus $1,200 under the House bill.
Unemployment insurance. The Senate proposal would offer a 13-week extension on unemployment benefits. The House has no such extension.
Housing provisions. The House bill calls for the caps on the size of loans that may be purchased by Fannie Mae and Freddie Mac to be raised from the current level of $417,000. It also calls for an increase in the size of loans that would be eligible to be insured by the Federal Housing Administration. The Senate proposal as mapped out by Baucus contains no such provisions.
Business tax breaks. The Senate proposal has the same breaks as the House bill but adds one more: the so-called net operating loss carryback (NOL). The NOL provision would extend to five years from two the number of years a company may apply its losses to past tax bills.
Cost. Official cost estimates have not been made yet, but it's widely thought that the Senate proposal would cost more.