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WASHINGTON - THE United States Senate Finance Committee approved a US$157 billion (S$223 billion) economic stimulus package that offers smaller tax rebates to more people than a plan passed by the US House of Representatives.
The package would provide a flat US$500 tax rebate to individuals and US$1,000 for couples, plus US$300 per child. The rebates also would go to about 20 million low income senior citizens on Social Security who would not be covered by the US$146 billion stimulus bill approved by the House on Tuesday.
The Finance Committee voted 14-7 on Wednesday for the plan and the Senate was expected to take up stimulus legislation quickly.
Committee Chairman Max Baucus, a Montana Democrat, said his package was based on the House-passed plan negotiated by House Speaker Nancy Pelosi, a California Democrat, House Republican Leader John Boehner of Ohio and Treasury Secretary Henry Paulson.
The House bill calls for rebates of up to US$600 for individuals and US$1,200 for married couples, plus US$300 per child. The rebates would phase out for individuals with more than US$75,000 in taxable income and married couples with more than US$150,000.
The Finance Committee bill would give US$500 and US$1,000 tax rebates to all eligible people. The House bill provides for a US$300 rebate for low-income individuals and US$600 to low-income families who paid no income taxes.
The Finance Committee bill would also make more higher income people eligible by doubling the caps to US$150,000 for individuals and US$300,000 for married couples. Unlike the House bill, the Senate package also includes tax breaks for a number of renewable energy resources.
Also unlike the House bill, the Finance Committee bill would extend unemployment benefits beyond the 26 weeks offered by most states.
Like the House bill, the Finance Committee measure includes business incentives for new purchases. But it goes further by allowing companies to write off more of their losses against previous tax years.
The committee bill would cost the federal treasury about US$157 billion this year and nearly US$36 billion next year.
However, the fate of the Finance Committee package is unclear. Senate Republican Leader Mitch McConnell of Kentucky has been pushing senators to accept the House package negotiated with the White House to avoid delays in issuing rebate checks.
Lawmakers hope the rebates and business incentives will spur consumer and corporate spending and keep the economy from dipping into a recession before the November presidential and congressional election.
US economic growth is expected to slow this year in the face of a downturn in the housing market, a subprime mortgage crisis, a tightening credit market and rising oil prices. -- REUTERS
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