ECONOMY:
 

Stimulus proponents need to navigate Senate

House will vote on $150 billion measure soon. Then it's on to the Senate, where lawmakers are already talking of adding provisions.

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By David Goldman, CNNMoney.com staff writer

What will you do with your tax rebate?
  • Spend it
  • Save it
  • Use it to pay off debt
  • Don't expect to get one

NEW YORK (CNNMoney.com) -- Bipartisan cooperation was the keyword of the day Thursday when House leaders and administration officials announced a $150 billion plan to stimulate the economy.

Now the Senate has to get its bite at the apple and the process could get messy.

Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, said he plans to hold a hearing next week to begin marking up a Senate stimulus package.

Treasury Secretary Henry Paulson urged the Senate to act fast.

"We know that the Senate is very important and they're going to go through their own deliberations," Paulson said. "But, again, I think the American people are not going to have a lot of patience for taking time."

The plan announced Thursday would provide some 117 million workers with tax rebates. It also calls for tax cuts to spur equipment purchases by businesses and has provisions aimed at bolstering the housing market by allowing Fannie Mae (FNM) and Freddie Mac's (FRE, Fortune 500) greater latitude in the kinds of mortgages it backs.

The House hopes to vote on the bill by early February, but senators have already begun discussing plans to add items to the proposal.

Democrats have said they might try to push for the addition of provisions on unemployment benefits, food stamps, road repair and summer jobs for youths. Some of those ideas were dropped after from previous versions of the deal.

Sen. Joe Lieberman, I-Conn., said he will try to return the unemployment and food stamp stipulations to the bill.

"I will work with my colleagues in the Senate to improve the House package by adding such measures," Lieberman said.

In a letter to Senate leadership, Sen. Patrick Leahy, D-Vt., echoed Lieberman's about food stamps.

Sen. Ron Wyden, D-Ore., spoke of the need for spending on road surfacing and other building projects to boost the economy.

"I am absolutely convinced that there are infrastructure projects that can get off the ground weeks and weeks earlier than the rebate checks end up in people's hands," Wyden said.

Of course, it's unclear how hard senators will advocate for their initiatives.

House Speaker Nancy Pelosi, D-Calif., and other Democrats initially supported a bill that included increased unemployment and food stamp benefits, but backed away from those demands in negotiations with the Bush administration.

Senate Democrats may follow suit.

"We think there will be a tradeoff," said Anne Mathias, policy director of research for the Stanford Group, a policy research firm. "It is possible that lawmakers in the House will accept the unemployment and food stamp spending provisions in exchange for the Senate accepting the changes to Fannie Mae and Freddie Mac's authority."

The current thinking in Washington is that the earliest bills could pass both the House and Senate and get to President Bush for his approval is around President's Day.

Mathias, who believes that first week of March is more realistic, said lawmakers are eager to get legislation enacted.

"I think it will move pretty quickly, because the momentum is there," she said. "Politicians can't say they will give people rebate checks and then back down." To top of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.