Economic Stimulus Package Moves Forward
Monday, February 9, 2009
6:15 PM

The Senate has just voted 61 to 36 to end debate on a new $780 billion economic stimulus package negotiated by Senators Ben Nelson (D-NE) and Susan Collins (R-ME), clearing the way for a final vote on the legislation tomorrow afternoon. Three GOP senators -- Arlen Specter of Pennsylvania and Olympia Snowe and Collins of Maine -- crossed the aisle to support the motion to end debate, which required a 60-vote majority. After accounting for the various floor amendments approved last week, the full cost of the legislation is now pegged at $829 billion, or roughly $10 billion more than the House-passed version.

"We have to complete this work this week," Majority Leader Harry Reid (D-NV) said today. "We will hopefully pass this tomorrow." Indeed, the support of Specter, Snowe and Collins all but guarantees passage tomorrow, though a final bill will still need to be ironed out by House and Senate leaders and conferees along with the White House.

On the tax front, the Nelson/Collins proposal trims $9 billion from the original bill by eliminating the five-year carryback of general business credits, and cuts $2 billion from the "making work pay" credit by lowering the phase out  for eligibility to $70,000 for individuals and $140,000 for married couples filing jointly. In addition, the refundable tax credit threshold is decreased to $8,100 for a savings of $3 billion.

The Senate added billions to the underlying legislation's overall price tag last week, including a $15,000 tax credit to individuals who purchase a home in the next year. Tax incentives for developing renewable energy technologies such as wind, solar, and geothermal are retained in the latest version.

"The bill remains a balanced approach to getting our economy back on track," said Senate Finance Committee Chairman Max Baucus (D-MT), the chamber's chief tax writer.

"This bill isn't a stimulus package," Sen. Mike Enzi (R-WY) countered. "It's a bloated appropriations package." Enzi argued that the $13.9 billion in additional funding for Pell grants and other initiatives such as education for disabled children should be funded through the regular appropriations process because the stimulus bill should contain only temporary spending increases. "And we're kidding ourselves if we think that after the stimulus bill we'll be able to return the Pell grants to their pre-stimulus level," he said. "If we try to go back to that funding level we will be accused of trying to make college unaffordable."