Momentum in Congress to pass a fiscal stimulus plan has halted for the moment, with the nation's political attention focused on the biggest primary day ever and, to a lesser degree, on the release of the president's FY 2009 budget proposal. Indeed, because Super Tuesday has three senators hop-scotching around the country, Senate leaders have put off an expected showdown over the plan until Wednesday, Feb. 6. In a 385-35 vote on Jan. 29, the House approved H.R. 5140, the Recovery Rebates and Economic Stimulus for the American People Act of 2008, a $146 billion economic stimulus package worked out by House and administration negotiators. The package features just under $100 billion in tax rebates that would provide checks of up to $600 for individuals and $1,200 for families filing jointly. The rebate would be available to taxpayers earning over $3,000 in wages and would be phased out for individuals earning over $75,000 and families earning over $150,000. The package also provides tax credits for businesses totaling roughly $50 billion.

On the same day, Senate Finance Committee Chair Max Baucus (D-MT) held a hearing on his version of an economic stimulus, which would provide for:

• An extension of unemployment insurance benefits for 13 weeks, and 13 weeks on top of that for states with a sustained unemployment rate of 6.5 percent or more. This was not included in the House bill.
• Broadening the definition of income to include not just wages, as in the House bill, but also self-employment income, veterans' disability payments, and Social Security benefits — making an additional 250,000 veterans and 20 million seniors eligible for rebates
• An increase in the phase-out points to $150,000 for individuals and $300,000 for families

On Jan. 30, in a 14-7 vote, the committee approved a slightly modified version of Baucus' proposal.

But when Senate Majority Leader Harry Reid (D-NV) sought to schedule a vote on the Finance Committee's stimulus bill, Minority Leader Mitch McConnell (R-KY) objected, saying the committee had taken a "Christmas tree approach" that will delay economic growth. McConnell threatened to filibuster, preventing the Senate from voting on Baucus' proposal or on amendments to the House bill. 2007 proved time and again the difficulty of prevailing in the face of McConnell's filibuster threats in such a closely divided Senate. While three Republicans voted to approve the Baucus proposal in the Finance Committee, even if all 51 Democrats support that version, six additional Republican votes would be needed to permit the Senate to consider the proposal.

Despite this, there are two factors that point increasingly in favor of adoption of an expanded version of the stimulus package. As Sen. Debbie Stabenow (D-MI) said on Feb. 4, "[P]ressure from outside groups… a huge coalition, from business to workers to seniors and veterans to environmentalists that favor the Finance package is helping sway senators." Furthermore, the most recent Bureau of Labor Statistics report showed the economy lost 17,000 jobs in January, the worst tally in more than four years. Over the past three months, an average of only 42,000 jobs were created each month, compared with 169,000 in the same period a year ago.

This new data has led to calls for modifications to the House-passed stimulus bill. A Feb. 3 editorial in the New York Times argued for the extension of federal unemployment benefits for those workers who have exhausted their state benefits as the most plausible addition to the House stimulus bill:

The White House is wrongly insisting that lawmakers stick with a bill it negotiated with House leaders before the new data was released. That version omits jobless benefits and centers instead on — what else? — tax cuts. In the Senate, which may vote this week on its own stimulus bill, Republicans are blocking a Democratic push for jobless benefits. Their objection: Extended unemployment benefits encourage idleness….

Some, including Vice President Dick Cheney, warn against changing the House plan, saying that stimulus delayed is stimulus denied. But, as the Center on Budget and Policy Priorities, among others, has pointed out, the machinations of how the rebate checks would be sent out by the IRS give a cushion for further consideration of and refinement to the current stimulus proposals. Because the IRS will use 2007 tax returns to determine the size of individual rebates and requires 60 days to reprogram its computers, regardless of when Congress acts, the checks cannot be mailed before the middle of May. In fact, including unemployment benefits would likely accelerate the delivery of stimulus rather than slow it down as those benefits would be available to those who need it before the rebate checks are on their way.

At the end of the week of Jan. 28, the Democrats appeared ready to accept defeat in the Senate because they did not have the 60 votes to bring the Finance Committee bill to a vote. Yet on Feb. 4, Reid announced new energy to get a vote on the Finance Committee package and even added $1 billion for low-income heating assistance to sweeten the package for Republicans. However, McConnell threatened to use all 30 hours of debate to stall consideration of the bill and claimed he had 41 votes to stop a vote. Nonetheless, the Senate voted 80-4 on Feb. 4 to proceed with debate on the House bill. Reid now plans a series of votes on potential amendments to the House bill, including the Finance Committee package, low-income heating assistance funds, a proposal to raise conforming loan limits for Fannie Mae, Freddie Mac, and Federal Housing Administration-backed mortgages, increases in food stamp benefits, and tax breaks for renewable energy production.

Reid argues he has the 60 votes to get a version of the Finance Committee stimulus passed in the Senate, but by all counts, it will be a close call.