Senate sets economic stimulus debate next week

By Richard Cowan and Thomas Ferraro

WASHINGTON (Reuters) - The U.S. Senate on Thursday pushed back until next week a showdown on an economic stimulus package, with Democrats seeking to expand the tax rebates and other benefits approved by the House of Representatives.

Senate Majority Leader Harry Reid, a Nevada Democrat, called the $146 billion bill that passed overwhelmingly in the House on Tuesday a "good package." But Reid said he was supporting a broader bill approved on Wednesday by the Senate Finance Committee.

Reid said he expected the Finance Committee measure to be blocked by Senate Republicans on Monday, which would open the door to votes on several other ideas on stimulating the economy, which some fear could be headed toward recession.

The House-passed bill would give individuals a one-time $600 payment and couples $1,200. The tax rebates would begin phasing out for individuals earning more than $75,000 and married couples making more than $150,000. The Senate panel would allow for $500 and $1,000 payments, respectively, but with much higher income caps and to more people.

The apparently doomed Senate Finance Committee measure would cost $157 billion next year and would provide quick tax rebates to more Americans and also include senior citizens who receive Social Security retirement benefits but do not have earned income. Tacked onto this package were energy tax benefits not included by the House.

Reid sketched out a series of votes he intends to call next week in the Senate, which could culminate in passage of an amended House bill to include cash payments to 20 million elderly not covered in that measure as well as expanded unemployment benefits and payments to 250,000 disabled veterans.

"I don't think that the Senate wants to deprive 20 million seniors of a rebate check," said Finance Committee Chairman Max Baucus, a Montana Democrat.

The Senate was expected to begin consideration of the bills passed by the Senate Finance Committee and House as early as Thursday, but Reid decided to postpone action until next week.