Senators have own ideas on stimulus

Just when House Democratic leaders and President Bush reach a rare political compromise on an economic stimulus plan, the Senate threatened Friday to rain on their bipartisan parade.

Senators from both parties were already drafting their own plans, which could increase spending and draw the ire of deficit-minded lawmakers. It could also complicate efforts to get checks in the mail to millions of Americans by late spring.

Sounding the alarm about Senate tinkering, White House spokeswoman Dana Perino said: “We believe this is a very good bipartisan compromise, and it would be unfortunate if the Senate did anything to slow it down or blow it up.”

Although both chambers are controlled by Democrats, senators are notoriously protective of their prerogatives. “The Senate is not going to willy-nilly rubber-stamp what the House does,” Sen. Max Baucus (D-Mont.), chairman of the finance committee, said in a telephone interview.

Greg Valliere, chief political strategist for the financial services firm Stanford Group Co., said he expected a plan to clear Congress, even if the Senate fiddled with it: “The Senate is notoriously independent and unwilling to be stampeded; this will be no exception.”

Still, he expected a package to become law within the next few weeks. “In the final analysis, most lawmakers are aghast to see their public approval ratings at all-time lows. This gives them an opportunity to show they can act quickly -- even the Senate,” he said.

In a rare display of bipartisanship, House Democratic and Republican leaders and the president agreed Thursday to a roughly $150-billion plan that would provide tax rebates of as much as $1,200 per household -- plus $300 per child -- as well as business tax breaks to spur investment. Rebates would be phased out gradually for single filers earning more than $75,000 and couples earning more than $150,000 a year.

Both parties made concessions. Republicans backed away from seeking to make Bush’s tax cuts permanent as part of the package and agreed to a Democratic demand to give rebates to workers who earn too little to pay income taxes. Democrats gave up calls to extend unemployment benefits and spend more on food stamps.

House Minority Leader John A. Boehner (R-Ohio), a key negotiator, expressed concern Friday that the compromise could unravel if senators tinkered too much: “It would be irresponsible for Senate Democrats to load this bill up with pork and other spending.”

Bush, speaking at a House GOP retreat in West Virginia, called the package big enough to help the economy and urged Congress to pass it as soon as possible “to get money in the hands of the people who are going to help this economy stay strong.”

“I strongly believe it would be a mistake to delay or derail this bill,” he said.

Senators from both parties say they are just as eager as the president and House leaders to reach a deal. But senators have their own ideas of what should be included in the package, including increased spending on unemployment benefits, food stamps, energy assistance to low-income families and aid to states for infrastructure projects.

Sen. Dianne Feinstein (D-Calif.) said that one of her concerns about the compromise reached between the House and the White House was that “rebates don’t get to the people until May or June. So the Senate should consider extending unemployment insurance and increasing food stamps to get help quickly to those who need it most.”

A number of senators called for doing more to help seniors, including those who live primarily on Social Security.

Sen. Barbara Boxer (D-Calif.) in a letter to Senate leaders Friday urged aid for seniors who do not pay taxes. They must have at least $3,000 in earned income to be eligible for a rebate. “California is home to 3.9 million people age 65 and older, many of whom live on fixed incomes and are particularly hard hit by rising prices,” she said.

AARP spokesman Jim Dau said the organization believed that non-taxed seniors should be part of any stimulus package -- even if that means spending more on food stamps or home heating assistance.

Boxer listed other ideas for an economic stimulus plan, including $10 billion to help communities combat a rising tide of vacant houses caused by foreclosures and giving tax breaks to promote “green jobs.”

Senate Democrats weren’t the only ones offering ideas.

Sen. Olympia J. Snowe (R-Maine), a finance committee member, said she would push to include an unemployment insurance extension in the final stimulus package.

Baucus, who said he had been discussing his ideas with Treasury Secretary Henry M. Paulson, expressed confidence that any changes would help speed passage of the measure through the Senate and get it to the president’s desk by mid-February. He expected his committee to take up a bill next week and increase spending “just a little bit.”

“These are dollars that are going to be spent, and therefore, help the economy,” he said.

Robert L. Bixby, executive director of the Concord Coalition, a budget watchdog organization, said he feared an “expensive bidding war.”

“If the Senate votes for extended unemployment compensation and additional food stamp money, House Republicans might demand additional tax breaks for business in return,” he said.

“Unfortunately, I can imagine such a bargain being struck at the last minute before the February recess when there will be tremendous pressure to pass almost anything.”

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richard.simon@latimes.com