By Alison Fitzgerald
Jan. 25 (Bloomberg) -- The bipartisan agreement on an economic stimulus package reached by House leaders was immediately undermined by senators intent on ensuring that their ideas get a hearing before any bill becomes law.
Even before House Speaker Nancy Pelosi of California and the chamber's minority leader, John Boehner of Ohio, stood together yesterday on Capitol Hill to announce their agreement, Senate Finance Committee Chairman Max Baucus, a Montana Democrat, said he planned to introduce his own bill.
After a week of talk about the need for quick cooperation among Democrats and Republicans, the House leaders agreed with the Bush administration on a plan to distribute rebate checks to 117 million families earning at least $3,000, give businesses incentives to invest in equipment and allow federally chartered mortgage-finance companies Fannie Mae and Freddie Mac to buy mortgages of up to $729,750.
``This is all great for Pelosi and Boehner and Hank Paulson having a big love fest together, but what about the Senate?'' said Alex Brill, a research fellow at the Washington-based American Enterprise Institute and former adviser to the tax- writing House Ways and Means Committee. He said the deal between the House and President George W. Bush may founder in the Senate.
`Need for Speed'
Bush spokeswoman Dana Perino urged the Senate to ratify the agreement the administration made with the House. ``There is a need for speed,'' Perino told reporters today. ``We believe this is a very good bipartisan compromise, and it would be unfortunate if the Senate did anything to slow it down or blow it up.''
Pelosi, 67, and Boehner anticipated that the Senate may stray from their agreement. ``This is not going to preclude the Senate from being the Senate and doing what they do,'' Boehner, 58, said at a news conference yesterday with Pelosi and Treasury Secretary Henry Paulson. ``Far be it from me to predict what the Senate might do in their very senatorial roles.''
Lawmakers are racing to enact a stimulus measure to try to counter escalating risks of a recession. The Federal Reserve this week made an emergency cut in its benchmark overnight lending rate, lowering it three-quarters of a point to 3.5 percent.
In a statement yesterday, Bush said the U.S. economy faces short-term disruptions in the housing market and rising energy prices. ``The country needs this boost to the economy now,'' said Bush, 61. The agreement will result in ``higher consumer spending and increased business investment this year.''
More People
Baucus, 66, said he opposes House provisions restricting tax rebates to those who earned $3,000 last year. He said in an interview he prefers sending smaller checks to more people, as many as 30 million additional Americans, who would not meet that income threshold. ``Rebate checks should go to all Americans under that income limit,'' Baucus said.
Other senators said they wanted to contribute their own provisions. Senate Majority Leader Harry Reid, a Nevada Democrat, said the House proposal's $150 billion price tag wouldn't be viewed as a ``magical figure.'' Baucus said the package may grow to as much as $175 billion as lawmakers add money for programs benefiting low-income Americans along with tax breaks aimed at helping unprofitable companies.
``It may be a little bit more, but not a lot,'' Baucus said when asked about the plan's potential price tag. ``Something close to 150, 175.''
Reid, 68, said members of the Finance Committee ``and other senators will work to improve the House package by adding funds for other initiatives that can boost the economy immediately, such as unemployment benefits, nutrition assistance, state relief and infrastructure investment.''
Unemployment Insurance
Senator Hillary Clinton, 60, who is seeking the Democratic presidential nomination, said in a statement that she wants to see an extension of unemployment insurance and help for people struggling to pay high energy bills included in any measure.
Fellow New York Senator Charles Schumer, the No. 3 Democratic leader, said his goal is to win approval of additional unemployment benefits for laid-off workers. ``It's the most effective way to move the economy forward,'' said Schumer, 57.
Senator Ron Wyden, an Oregon Democrat, said infrastructure spending -- specifically road resurfacing -- would be a faster and better use of the money. ``There are infrastructure projects that can get off the ground faster than rebate checks,'' said Wyden, 58.
Individual senators can delay passage of a bill if they decide to fight for a provision. ``Much of what the Senate does is done by unanimous consent,'' said Pete Davis, president of Davis Capital Investment Ideas, a Washington-based consulting firm. ``Anything controversial takes a long time to move, if it ever does.''
Permanent Tax Cuts
Davis said Republican senators may also want to put their mark on the stimulus package by using it as a vehicle to make Bush's tax cuts permanent, lowering business taxes and extending energy tax credits.
Under the House plan, individuals would receive rebates of up to $600 and couples may get $1,200, plus $300 per child. Rebates would be phased out for individuals earning more than $75,000 and couples earning more than $150,000. Individuals must earn at least $3,000 to get a $300 rebate.
Paulson, 61, said the rebate checks may be mailed 60 days after the proposal becomes law.
The accord also seeks to address the growing number of housing foreclosures by including a provision allowing Fannie Mae and Freddie Mac, the largest U.S. mortgage-finance companies, to temporarily buy mortgages of up to $729,750, exceeding a $417,000 federal limit.
To contact the reporter on this story: Alison Fitzgerald in Washington at Afitzgerald2@bloomberg.net
Last Updated: January 25, 2008 14:16 EST
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