February 7, 2008 / 12:15 AM / in 10 years

Senate passes economic plan and sends to House

WASHINGTON (Reuters) - The U.S. Senate on Thursday passed an economic stimulus plan that would send government rebate checks to millions of Americans including retirees and disabled veterans to help lift the economy and stave off an election-year recession.

The Senate voted 81-16 in favor of the package, which will provide one-time rebates of up to $600 for individuals or $1,200 for couples plus $300 for each child. Low income people, including retirees on Social Security and disabled veterans who pay no income taxes, would receive checks of $300.

The checks could be in the mail within months.

The House of Representatives is expected to also vote on the package on Thursday and send it to President George W. Bush for his signature.

The Senate overwhelmingly agreed to the measure, which would inject more than $150 billion into the economy this year, after Republicans on Wednesday blocked a broader bill that would have provided more tax breaks for businesses and benefits for long-term unemployed people.

Senate Majority Leader Harry Reid, a Nevada Democrat, said the stimulus package approved by the Senate would “change the economic direction of this country” and added that lawmakers likely would do more this year to stimulate the economy.

The latest economic data suggest the U.S. economy is stalling. Pending sales of previously owned homes fell by 1.5 percent in December and were off a sharp 24 percent from a year ago, the National Association of Realtors said on Thursday.

Speaker of the House Nancy Pelosi (D-CA) and House Minority Leader John Boehner (R-OH) speak at a press conference about the passage of a bipartisan economic stimulus package by the House on Capitol Hill, January 29, 2008. REUTERS/Joshua Roberts

At the same time the Labor Department said number of workers drawing jobless benefits has hit a 2 1/4-year high and major retailers reported a slowdown in consumer spending.

Lawmakers hope the rebate checks and expanded tax benefits for businesses who make new investments in plants and equipment will send Americans on a shopping spree that will help jump start the economy.

The bill also provides for higher loan limits for the Federal Housing Administration plus mortgage giants Fannie Mae and Freddie Mac.

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Reid said Republicans’ opposition to providing expanded unemployment benefits and aid to low-income families for paying winter heating bills would haunt them in the November elections.

“They are following this president right off a cliff,” Reid said.

Senate Republican Leader Mitch McConnell of Kentucky said the economic package transcended politics.

“This is not a victory for Republicans or Democrats. This is a victory for the American people,” McConnell said.

Reid and other Democratic senators said they would try to move legislation later this year expanding unemployment benefits and helping the housing industry.

Reporting by Donna Smith, editing by David Alexander

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