There's extra incentive this year to file tax returns as early as possible. The sooner you file, the earlier the IRS will cut that check so you can spend, spend, spend and stimulate the sluggish economy.
But don't go racking up credit card debt now assuming you can pay it off with that rebate. While the House and the Bush administration managed to compromise on a fairly simple stimulus package, the Senate can't nail down when they'll even vote on the House version and a much broader plan passed by the Senate Finance Committee yesterday. It's so broad, in fact, that opponents like Senate minority leader Mitch McConnell accused the Finance Committee of taking a "Christmas tree approach" that will delay economic growth.
Cutting through the spin on both sides, what are the real differences?
Rebates: The House bill gives individuals $600 rebates and couples $1,200. Plus, kids get tax payers another $300 each. They cap who's eligible for the rebate at $75,000 for individuals and $150,000 for couples. The Senate version doubles the caps to $150,000 and $300,000 making more people eligible for rebates, but they cut the rebates to $500 and $1000. Kids? Still worth $300 each. It also expands who's eligible to include social security beneficiaries and disabled veterans without taxable income.
Business Incentives: The Senate plan is much broader on business incentives than the House version. It extends tax cuts for businesses and families that invest in alternative energy and gives struggling businesses another year of tax write-offs if they're reporting losses.
Unemployment Benefits/Food Stamps: House Speaker Nancy Pelosi gave up on expanding unemployment benefits in negotiations with the Administration and House Republicans. But the Senate package adds thirteen weeks and even more for states with unemployment rates higher than 6.5 percent. Both House Democrats and members of the Senate Finance Committee wanted to increase food stamps, but are punting that to the Agriculture Committee's Farm Bill.
The two chambers of Congress are surely at odds over the best way to jump-start the economy, but voters are chomping at the bit to get that cash and holding back would be a risky political move in an election year.
Senate Democrats hope to get a bill on the president's desk by President's Day.