Senate leaders agree on economic aid plan with checks for seniors, disabled veterans

By Andrew Taylor

WASHINGTON – Senate Republicans and Democrats agreed Thursday to add rebates for 20 million older people and 250,000 disabled veterans to a House-passed economic aid plan, ending a partisan stalemate.

The breakthrough came when Democrats, under pressure from party colleagues in the House, agreed to drop their insistence on adding jobless benefits, heating aid for the poor and business subsidies. Senate Democrats said they would allow a vote on a proposal that extends the tax rebates to Social Security retirees and disabled veterans.

The approximately $170 billion measure would rush tax rebates of $600 for individuals and $1,200 for couples to most taxpayers and cut taxes for businesses in hopes of reviving the economy. Individuals earning up to $75,000 a year and couples earning up to $150,000 would get rebates. People who paid no income taxes but earned at least $3,000 a year would get a $300 rebate.

The important changes to the House-passed bill were the $300 rebates check to older people and disabled veterans. They did not qualify under the House measure that passed last month. That plan was negotiated by Speaker Nancy Pelosi, D-Calif., GOP leader John Boehner of Ohio and Treasury Secretary Henry Paulson.

A separate change in the Senate was designed to ensure that illegal immigrants do not get rebate checks.

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“We’re on the verge here of an important bipartisan accomplishment,” said Senate Minority Leader Mitch McConnell, R-Ky.

Senate Democrats had sought to add 13 weeks of added jobless benefits, home heating subsidies, and new tax refunds for coal producers and struggling corporations. Majority Leader Harry Reid, D-Nev., pledged to hold votes in the future on those ideas.

“We all have to acknowledge that the House bill has been improved significantly. … We’ll be back and do more things to help stimulate the economy,” Reid said.

A Senate vote on the measure was set for later Thursday. Pending Senate approval, the House was expected to send the bill to President Bush by week’s end.

The turnaround came after Democrats on Wednesday fell just one vote short of pressing their larger, $205 billion plan past a GOP filibuster.

The next day, Democrats opted not to continue the battle. The retreat came after Pelosi split with Reid and sided with Republicans, including McConnell. She urged the Senate to stop its infighting and pass the bill.

“There’s no reason for any more delay on this,” Pelosi said.

In blocking the Democrats who control the Senate, Republicans objected to add-ons such as a $14.5 billion unemployment extension for people whose benefits have run out; $1 billion in heating aid for the poor; and tax breaks for renewable energy producers.

“Discretion is the better part of valor. The best thing for us to do is declare a big victory that we’ve achieved, namely getting the rebate checks to 20 million seniors and 250,000 disabled veterans,” said the chairman of the Senate Finance Committee, Sen. Max Baucus, D-Mont.

The measure moved through Congress with remarkable speed amid a series of deflating economic reports. Some Republicans, however, expressed reservations that the rebate checks would help much. Other lawmakers worried about expanding the budget deficit.

“We have to remember that every dollar being spent on the stimulus package is being borrowed from our children. And our children’s children,” said Sen. Judd Gregg, R-N.H.