The House passed a $146 billion economic stimulus package with an overwhelming 385-35 vote.
But that victory could be hollow, given the problems created by Senate Finance Committee Chairman Max Baucus’ bill that will be debated Wednesday in committee.
The Montana Democrat has removed income caps from his version of the bill, meaning upper-income people, including millionaires, would receive $500 or $1,000 tax rebates.
The House-passed bill starts phasing out rebates at $75,000 for individuals and $150,000 for households.
Sen. Byron Dorgan (D-N.D.) called removing income caps “absurd,” while Sen. Kent Conrad (D-N.D.), the Budget Committee chairman, said “sending $1,000 checks to Donald Trump, Bill Gates … doesn’t do a lot of good” for the economy.
Even Senate Majority Leader Harry Reid (D-Nev.) suggested Baucus put the income caps back in the bill.
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It would “send the wrong message” if the package included benefits for the wealthy, Reid said. “I think Warren Buffett should not have that rebate.”
The uncertainty ahead on this legislation shows just how difficult it still is in a divided government to move quickly in Congress — even with an idea as popular as sending money to voters in an election year.
Speaker Nancy Pelosi (D-Calif.) said removing the income caps would undermine the goal of giving lower- and middle-income people some extra cash to spend in the economy.
“We hope a focus on middle-income and low-income people will be retained by the Senate,” Pelosi said.
After the bill passed the House on Tuesday afternoon, Pelosi gave some free advice to the Senate.
“I hope the Senate will take heed. It’s not unprecedented that one chamber has yielded to another,” Pelosi said.
“I hope the Senate … will take this bill and run with it.”
Baucus, who was largely left out of the negotiations between Congress and the White House on the economic package, has suddenly found himself as the linchpin of the entire deal, and he offered a vigorous defense of his efforts to overhaul the House bill.
“The House rebate package is very confusing,” Baucus said. “Some neighbors will get [rebate checks], ... some won’t” because of the income caps.
Baucus also pointed out that in order to add other spending, including a 13-week extension of unemployment benefits and rebates for seniors on Social Security, he needed to remove income caps from his bill so that upper-income taxpayers would also receive a rebate.
Getting rid of caps will draw Republican support in the Senate, he said.
“The goal is to get a better package,” Baucus said. “Our treatment of the caps will pass the committee, and it will pass the Senate.”
That bold prediction came as somewhat of a surprise to Baucus’ fellow Democrats, who have rallied behind the populist push for rebates for lower- and middle-income taxpayers in an effort to boost consumer spending.
“It’s preposterous to send rebates … to those who are making millions of dollars,” Dorgan said.
“The people who are most likely to boost the economy [and spend their rebate checks] are those who are in the lower and middle class.”
In an odd twist, Senate Minority Leader Mitch McConnell (R-Ky.), who has been accused of leading too many filibusters of Democratic bills, says the Senate should simply get out of the way, embrace the House bill and get rebate checks to taxpayers as quickly as possible.
“This isnot the time to get into some kind of testing of wills,” McConnell said. “Time is of the essence here.”
House Minority Leader John A. Boehner (R-Ohio) pointed out that House leaders had to turn down literally hundreds of requests from lawmakers who wanted to load up the bill with other forms of economic aid.
Boehner suggested that the Senate is getting bogged down in the legislative process and should essentially ignore the chorus of ideas in order to get something done.
“Once you begin to look at all these other issues, it becomes harder to make a deal,” Boehner said.
Baucus gave no indication that he’s willing to back away from his version of the economic stimulus bill quite yet.
But at the same time, he seemed willing to compromise once the Senate has its say.
“Nobody wants to be held responsible for stopping this,” Baucus said.
Amie Parnes contributed to this story.