House approves stimulus plan

WASHINGTON —  Less than a week after quickly crafting a rare bipartisan compromise, the House on Tuesday overwhelmingly passed a $150-billion economic stimulus package to send checks to millions of low- and middle-income Americans.

But what shape the final legislation will take remains unclear as the Senate begins debate on its own plan amid more signs of economic instability.

Senate Finance Committee Chairman Max Baucus (D-Mont.) will convene a meeting today to consider his version, which differs substantially from the House bill. And other senators are pushing a number of proposals that would augment the carefully crafted deal announced last week by House leaders and the Bush administration.

The House measure -- a mix of tax rebates, business incentives and relief for strapped mortgage-holders -- passed 385 to 35. But the lopsided vote did nothing to deter the Senate from seeking to put its own imprint on the politically popular legislation.

“What the House has done is important and good,” Senate Majority Leader Harry Reid (D-Nev.) said Tuesday afternoon, but there are 51 Democratic senators “without exception who believe this package can be made better.”

The majority leader said he had received 15 letters from lawmakers proposing additions, including more spending on public works and more mortgage assistance.

The proliferating suggestions, which could jeopardize chances of passing a stimulus package by mid-February, have set off alarm bells in the White House and the House of Representatives.

On Monday, President Bush warned senators in his State of the Union speech not to “load up the bill” with additional payouts.

And Tuesday, House Speaker Nancy Pelosi (D-San Francisco) -- who worked with House Minority Leader John A. Boehner (R-Ohio) and Treasury Secretary Henry M. Paulson to put together the bill -- repeatedly asked senators not to tie up the legislation. “I would hope that the timely aspect of this is recognized by our colleagues in the Senate,” she said.

After the House version passed, she and Boehner stood together at a Capitol news conference to urge swift action.

The relatively simple House measure relies primarily on tax rebates for most households and a package of temporary tax breaks to encourage businesses to expand and to create more jobs this year. Single filers would get a $600 rebate that would begin phasing out for taxpayers earning more than $75,000. The phase-out for married couples -- who would get rebates of $1,200 or more if they have children -- would start at $150,000.

In a provision that could benefit California and other states with high housing costs, the House bill includes a large one-year increase in the size of mortgages that can be backed by the government, making it easier for homeowners to refinance into more-affordable mortgages.

Momentum for the stimulus package has built amid growing fears of a recession.

On Tuesday the Commerce Department reported that durable goods orders had jumped by 5.2% in December, the strongest showing in five months, suggesting not all segments of the economy had been affected by the collapse of the housing market.

However, indexes reporting consumer confidence and home prices both dropped. And the International Monetary Fund predicted that global economic growth would slow from 4.9% to 4.1% in the coming months.

The Federal Reserve is to announce today whether it will continue to drop interest rates in another effort to boost the economy.

Citing the grim economic landscape, Senate Minority Leader Mitch McConnell (R-Ky.), said Tuesday that a majority of GOP senators would support the bill passed by the House. “The need for speed, the importance of bipartisanship in reassuring the markets and the American people are pretty persuasive arguments to my members,” he said.

Many Democratic senators see the measure as inadequate, however.

“I have an obligation as a United States senator to try to get the maximum value of the stimulus dollar,” Sen. Ron Wyden (D-Ore.) said. “We have no interest in slowing this down. . . . But we ought to have the debate.”

Baucus has proposed the most comprehensive alternative to the House bill.

The finance committee chairman would make smaller rebates available to millions more taxpayers, including seniors living on Social Security, who are not covered by the House bill. He also has proposed sending rebates to wealthy Americans who would not get checks under the House plan -- an idea that upsets some of his fellow Democrats.

Most Americans would receive a $500 check under his plan.

Baucus also would like to extend unemployment benefits for an additional 13 weeks, which House Democrats agreed to drop in their compromise with the Bush administration.

“The White House says we mustn’t slow the economic stimulus agreement down, or blow it up. I agree,” Baucus said. “We’re going to improve it.”

Baucus estimates his proposal could cost as much as $161 billion.

Wyden is one of 22 Democratic and Republican senators who sent a letter to congressional leaders urging the inclusion of $5 billion in new spending on infrastructure projects, which they argue could pump money into the economy faster than rebate checks.

In a speech on the Senate floor Tuesday, Sen. Christopher J. Dodd (D-Conn.) called for $10 billion more in aid to local governments to renovate and resell foreclosed and abandoned homes that are blighting many poor urban neighborhoods.

A bipartisan group of senators from northern states is calling for $3.6 billion more in federal assistance to help poor Americans pay their heating bills.

Senate Democrats downplayed the chances that the proposed additions would stall the legislation in their notoriously slow-moving chamber. “I’m confident we can keep it simple,” said Sen. Ken Salazar (D-Colo.), predicting Senate approval this week.

Senior Democrats urged swift action at the party’s weekly luncheon Tuesday. And Reid said he might bring up the legislation as soon as tonight.

But some lawmakers appear less concerned about the need for speed.

Senate Budget Committee Chairman Kent Conrad (D-N.D.) said negotiations could go into mid-February without having a serious negative effect. “No matter what we do, the checks can’t go out until May,” he said, noting that the Internal Revenue Service is not able to send out rebates before then.

noam.levey@latimes.com

richard.simon@latimes.com

Times staff writer Maura Reynolds contributed to this report.