Congress, facing the prospect of an election-year recession, passed an emergency plan Thursday that rushes rebates of $600 to $1,200 to most taxpayers and $300 checks to senior citizens, disabled veterans and other low-income people. President Bush indicated he would sign the measure, and rebate checks could begin reaching recipients by mid May.
House passage by a 380-34 vote came a few hours after Senate leaders ended a drawn-out stalemate over the bill. The plan, which adds $168-billion to the deficit over two years, is intended to provide cash for people to spend and tax relief for businesses to make new investments - boosts for an economy battered by a housing downturn and credit crunch.
"Hunker down," Wachovia Corp. senior economist John Silvia told about 1,000 shopping center developers and financing executives gathered for an annual meeting in Clearwater.
"If you've only been in this industry a few years, the next six months will the toughest your business ever experienced.''
Major retailers on Thursday reported their worst January in nearly four decades, signaling a shopping slump has deepened since a disappointing holiday season.
Congress' action on the stimulus package reflected not only the growing concerns that the nation already has slipped into a recession but also the desire to convince voters that the government is capable of responding quickly. All Tampa Bay area representatives voted in favor of the bill, as did Florida Sens. Mel Martinez and Bill Nelson.
The rebates would be based on 2007 tax returns, which are not due until April 15. The legislation would rush rebates - $600 for individuals, $1,200 for couples, plus $300 for each child younger than 17 - to most taxpayers and cut business taxes in hopes of reviving the economy. Individuals making up to $75,000 a year and couples earning up to $150,000 would get the full rebate, with those making more than that getting smaller checks.
People who paid no income taxes but earned at least $3,000 - including through Social Security or veterans' disability benefits - would get a $300 rebate.
"We believe the stimulus, the way it is targeted, will put money into the hands of those who will spend it immediately, injecting demand into the economy and therefore creating jobs," House Speaker Nancy Pelosi, D-Calif., told colleagues.
The Senate's 81-16 vote capped more than a week of political maneuvering. The stalemate ended when majority Democrats dropped their demand that the rescue proposal offer jobless benefits, heating aid for the poor and tax breaks for the home building and energy industries. GOP senators refused to relent in their opposition to those ideas, but did agree to add $300 rebates for older people and disabled veterans to a $161-billion measure the House passed last month.
"This is the Senate at its finest, recognizing this was an opportunity to demonstrate to the public that we could come together, do something important for the country and do it quickly," said Senate Minority Leader Mitch McConnell, R-Ky. "We were able to put aside our differences not only in the Senate but with our colleagues in the House and with the administration."
"It's tremendous what we've been able to accomplish," Senate Majority Leader Harry Reid, D-Nev., added.
Bush released a statement supporting the amended plan, saying it "is robust, broad-based, timely, and it will be effective. This bill will help to stimulate consumer spending and accelerate needed business investment."
The logjam broke quickly after Reid concluded Thursday morning that he could not find one more Republican vote to approve consideration of a more expensive plan crafted by the Senate. Instead, the Senate added nearly $6-billion in benefits to the package fashioned by Bush, Pelosi and House Minority Leader John Boehner, R-Ohio.
Businesses would be given generous incentives to invest in new plants and equipment. The Federal Housing Administration and the federally backed mortgage consolidators Fannie Mae and Freddie Mac would be allowed to insure larger home mortgages.
Senators also tightened rules to prevent illegal immigrants from claiming payments. In all, the tax checks will cost the Treasury $105.7-billion, all of which will be added to the budget deficit.
Senate Democrats had sought a considerably larger package that included an extension of unemployment insurance, billions of dollars in energy tax credits and federally backed bonds for home construction. It also would have ensured that low-income seniors, veterans and workers who earn too little to pay income tax would have received the same sized check, $500, as working individuals. It would have doubled eligibility thresholds, to $150,000 for individuals, $300,000 for couples.
But when a filibuster of that plan survived by a single vote, House Democratic leaders publicly pressured their Senate colleagues to scale back their ambitions and move fast.
"There is no reason for any more delay on this," Pelosi warned Thursday in a public break with Senate colleagues. "I don't think any change in the bill is really worth the delay."
The two Democratic presidential candidates, Sens. Hillary Rodham Clinton of New York and Barack Obama of Illinois, skipped the vote. The Republican front-runner, Sen. John McCain of Arizona, cast his first vote of the year on the bill, voting "yes." McCain had missed the vote the evening before.
Times staff writer Mark Albright contributed to this report.
What's in it for you?
Individuals making up to $75,000 last year would be eligible.
Couples making up to $150,000 last year would be eligible.
Veterans on disability, seniors on Social Security who paid no taxes.
In addition to the $1,200 per couple, families would receive $300 per child.