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Senate Democrats Push Back Stimulus Votes to Next Week

Votes that were expected Thursday on the economic stimulus package aimed at giving the U.S. economy a shot in the arm likely will be pushed off until at least Monday in to gain two crucial votes — from Sens. Hillary Clinton and Barack Obama.

While the two Democrats are locking horns on the presidential campaign trail, Senate Majority Leader Harry Reid is trying to gain enough support in Washington to pass an add-on to the $150 billion version that the House passed earlier this week.

Senate Democrats already are facing Republican criticism of foot-dragging and "Christmas Tree" decorating on the stimulus package because of one Senate plan to replace the House version. Reid is hoping to pass a slightly different plan next week.

The Senate is working on a bill that would change the House plan by adding to the amount of money the federal government would disburse to individual tax filers — from a $300 minimum to a $500 minimum — and add to the number of people who would get checks.

Reed will need Clinton and Obama to help add two provisions that Democrats consider vital to boosting the sagging economy. One would give rebate checks to low-income seniors and disabled veterans, a provision that would extend benefits to some 20 million low-income seniors and 75,000 disabled veterans. The other is heating-oil assistance for the poor.

The measures will need 60 votes to pass, which will largely come from the Democratic side of the aisle.

Reid spokesman Jim Manley said his boss is calling both the Obama and Clinton campaigns to talk through the strategy, but Manley made clear that "this vote on stimulus is not dictated by the campaign schedule."

The votes could happen as early as Monday, but it is possible that Reid will wait for after Super Tuesday.

If Reid's plan and the several others under consideration fail, the Senate most likely will take up the original version passed by the House and backed at 1600 Pennsylvania Ave.

"If it fails, we'll pass the House bill," said Sen. Chuck Schumer, D-N.Y., a member of the Senate Democratic leadership team.

This is the gameplan that arose during a Thursday-morning emergency meeting that Reid called after strong backlash arose against the package developed by Sen. Max Baucus, D-Mont., who is the Finance Committee chairman, according to sources who attended the meeting.

Reid called the meeting after a Wednesday committee vote on Baucus' bill showed slim GOP support for the plan, indicating likely failure once it hits the full Senate. Only three Republicans went for the bill, which Baucus created with the help of Ranking Minority Leader Charles Grassley.

The Baucus-Grassley bill adds additional business breaks and expands the number of taxpayers eligible for a rebate.

Reid is asking Clinton and Obama to head back to Washington Monday to help pass the most coveted provision of the Baucus-Grassley plan: a rebate check to 20 million low-income seniors and disabled veterans who receive Social Security benefits but have income that is too low to otherwise qualify for the rebates.

Supporters say the Baucus-Grassley bill also will fix a loophole in the House-passed economic stimulus package that allows some illegal immigrants to qualify for tax-rebate checks.

Immigration Flap

The fix requires that anyone eligible for a rebate envisioned in the House-passed stimulus package must have a valid Social Security number rather than an Individual Tax Identification Number.

The stimulus plan overwhelmingly passed the House Tuesday on a suspended vote, meaning no amendments were included in the initial legislation. A mini-brushfire broke out in the Capitol Wednesday as members realized that the decision to refund tax payments to ITIN holders meant illegal immigrants possibly could benefit.

The IRS classifies illegal workers in the United States for more than 31 days in the current year as "resident aliens." The majority of illegal immigrants in the United States are believed to be included as resident aliens under the IRS statutes.

Resident aliens can get an ITIN, pay taxes and file tax returns. The House measure expressly blocked "non-resident aliens," those who just arrived in the United States, have not been deported and have not spent any "substantial" time here.

The internal warfare among congressional Republicans centered on whether or not illegal immigrants who earned at least $3,000 in taxable income were eligible for a rebate. House Minority Leader John Boehner insisted illegal immigrants would not benefit because they generally do not use ITINs to file tax returns since the very use of ITINs indicates the return may have been filed by an illegal immigrant.

Still, Boehner's argument did not answer the question about the inclusion of the words "resident aliens" in the legislation, so the Senate came up with a compromise. Sen. John Ensign, R-Nev., a lead opponent of illegal immigrants getting rebates, said he was satisfied with changes made to the Senate panel's bill.

But Colorado Republican Rep. Tom Tancredo, one of the most vocal anti-illegal immigration voices in Washington, did not appear to take solace in Boehner's argument or the Senate fix. In a letter sent to Reid and Senate Minority Leader Mitch McConnell, Tancredo implored the Senate to "fix" the loophole.

"Whether the total amount of checks cut to illegal aliens from the U.S. Treasury amounts to $600 or $6 billion, I do not believe the American public supports a stimulus package that reinforces the idea that there is really no difference between illegal aliens and American citizens.

"Worse, given the well-documented tendency of illegal aliens to send large portions of their earnings back to relatives in their home country, it is quite possible that the lion’s share of any payments sent to illegal aliens will simply be sent abroad — stimulating a foreign economy rather than our own," Tancredo wrote.

Speaking with FOX News, Tancredo complained that the Senate's proposed fix also does not address a much greater problem:

"The fact that we know that Social Security numbers are compromised, the fact that thousands of people, maybe millions of people, we don't know for sure how many people, filed an income tax form with a fake Social Security number — we also know that there's absolutely no communication between the IRS and Social Security Administration," Tancredo said.

Moving Forward

Any differences between House and Senate versions of the legislation will require the two chambers to meet in a conference to create a single, unified bill. But the ability to craft a compromise might be more difficult than originally envisioned by the House.

The Senate Finance Committee approved a stimulus bill that would give $500 to tax filers who earned less than $150,000 in 2007, or $1,000 to married, joint tax filers with a combined income less than $300,000. Each child under 17 would be worth another $300.

The committee vote Wednesday was 14-5 — with just three committee Republicans joining all the Democrats on the panel.

The new cap is higher than the House-passed version, which places a $600 limit on singles making $75,000, or $1,200 for joint-filing married couples who make $150,000. With assorted other elements, it raises the package to a cost of $193 billion.

Baucus, under tremendous pressure from his Democratic colleagues to cut America's richest taxpayers out of the rebates, made the changes, and Grassley spoke favorably about the caps being inserted despite his preference for no caps.

But that's not the only point of contention. An extension to unemployment benefits is shaping up to be the central fight when this bill makes it to the Senate floor.

The Finance Committee bill extends unemployment payments for 13 weeks to those whose benefits have run out, with 26 more weeks available in states with a 6.5 percent unemployment rate.

Only four states qualify for this extra assistance: Alaska, Michigan, Mississippi and South Carolina. Grassley said he was willing to go along with the measure if it meant increasing households eligible for the rebates.

Republicans are vowing to fight this measure, pointing to a private-sector analysis that shows jobs grew in January 2008. Sen. Judd Gregg, R-N.H., railed against the need for the extension, saying it could actually have the reverse effect of what's intended in a stimulus bill.

"To extend unemployment insurance by a year, in areas where you have full employment, you give a disincentive for people to go out and get a job," Gregg said. His own state's unemployment rate is well below the national average, at 3.6 percent.

In addition to the provision for low-income seniors and veterans, Baucus-Grassley also includes a temporary, $5.6 billion measure aimed at benefiting producers of renewable energy such as wind and solar power. That's on top of the $50 billion in incentives approved by the House.

The Senate also reconstituted a measure left out of House negotiations that lets businesses change the way they expense losses. The incentive lets companies that are losing money to apply 2006 and 2007 losses to tax returns from profitable years dating back to 2001 and 2002 so they can get refunds on tax payments.

Some Democrats had wanted to add money for food stamps and heating aid for the poor, but Schumer said he feared that would load the bill down too much.

"We have to thread the needle here. We want to improve the bill, but we don't want to move it so far from the House bill that we slow it down," he said Wednesday.

Speaking in California on Wednesday, President Bush said he prefers the House package but wants to get legislation done by mid-February.

"If you're truly interested in dealing with the slowdown of the economy, the Senate ought to accept the House package, pass it and get it to my desk as soon as possible," the president said.

"The sooner you get a check, the more likely it is the stimulus package will kick in and make a difference."

FOX News' Trish Turner and Chad Pergram contributed to this report.