U.S. Senate Panel Backs $157 Billion Stimulus Plan

The package would provide a flat $500 tax rebate to individuals and $1,000 for couples, plus $300 per child.

The U.S. Senate Finance Committee approved a $157 billion economic stimulus package on Wednesday that offers smaller tax rebates to more people than a plan passed by the U.S. House of Representatives.

The package would provide a flat $500 tax rebate to individuals and $1,000 for couples, plus $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 $146 billion stimulus bill approved by the House on Tuesday.

The Finance Committee voted 14-7 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 $600 for individuals and $1,200 for married couples, plus $300 per child. The rebates would phase out for individuals with more than $75,000 in taxable income and married couples with more than $150,000.

The Finance Committee bill would give $500 and $1,000 tax rebates to all eligible people. The House bill provides for a $300 rebate for low-income individuals and $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 $150,000 for individuals and $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 $157 billion this year and nearly $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.

U.S. 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.