House Passes Economic Stimulus Plan, But Senate Rejects Measure

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The House on Friday passed a plan by Democrats to pump $61 billion in government spending into the economy through public works projects, help for the jobless and money for states struggling with their Medicaid bills.

The 264-158 tally was largely symbolic since it came just hours after Senate Republicans blocked a companion measure. The White House promised a veto in any event, saying the legislation would not work and would cost too much.

The bills follow a bipartisan plan enacted this winter that shipped $600-$1,200 tax rebate checks to most individuals and couples and awarded tax breaks to businesses investing in new plants and equipment.

With the economy still sagging, Democrats have long pressed for a follow-up plan that focused on more spending to extend unemployment benefits, boost food stamp payments and build infrastructure projects like roads, bridges, water and sewer projects and school repairs.

They got no interest from President Bush and his GOP allies in Congress.

"Record spending that could lead to record tax increases or higher deficits will not advance our economic recovery," the White House said in a statement.

Democratic leaders haven't seemed to take the idea very seriously, either, unveiling the measures only in the waning days of the congressional session despite talking about them for months. And in the Senate, Democrats added a provision to extend a moratorium on the development of oil shale, giving Republicans an additional reason to oppose the bill.

"The truth is that Senate leaders carefully stacked this package so that it would fail," said Sen. Thad Cochran, R-Miss.

Republicans charged that Democrats were more interested in using the votes against them in the fall campaign.

But Democrats said it's entirely appropriate for the bills to make a statement about party principles.

"Our stimulus package represents the right kind of economic policy — literally building a stronger country, investing in our children, investing in workers, and coming to the aid of struggling families," said Rep. George Miller, D-Calif.

The House plan was more focused on spending that would have an immediate impact on job creation. The Senate measure contains a wish-list of items long-sought by members of the Appropriations Committee, including money to provide U.S. Capitol police with new radios, accelerate NASA's development of a new space vehicle and move the Department of Homeland Security to a new headquarters.

Democrats contend that with the administration insisting on a $700 billion bailout for Wall Street holders of toxic mortgage securities, Bush should join them in providing federal help to the middle class and the poor. They cited studies by economists that say providing money — through food stamps and unemployment insurance — to people likely to spend it immediately has a proven record of boosting the economy.

"It injects money into infrastructure projects to create jobs directly and generate new economic activities," said Sen. Tom Harkin, D-Iowa. "We get the biggest buck stimulus-wise ... by expanding food stamp benefits. That's the best. The second best, extending unemployment benefits."

Other items in the legislation include:

—Funding for development of advanced batteries for fuel efficient cars.

—Money to upgrade Amtrak rail lines.

—Extending unemployment benefits for the long-term jobless by seven weeks in all states and 13 weeks in states with higher unemployment rates at a cost of $6 billion.

—Temporarily increasing federal payments to states to finance the Medicaid health care program for the poor and disabled. The Senate bill would provide $19.6 billion; the House version would cost $14.7 billion.

Meanwhile, Senate leaders pressed for a vote Saturday on a $630 billion-plus spending bill funding the Pentagon, veterans medical care, homeland security programs and keeping the government's other Cabinet agencies running at current levels after the new budget year starts on Wednesday.

That measure also contains $25 billion in federal loans for U.S. automakers to help them retool factories and develop technologies. And it would award Republicans with a long-sought victory — the lifting of a quarter-century ban on oil drilling off the Atlantic and Pacific coasts.

The measure, which Bush is expected to sign, also doubles the money for heating subsidies for the poor and provides $23 billion in aid for disaster-ravaged states. It would avert a shortfall in Pell college aid grants and address problems in the Women, Infants and Children program, which delivers healthy foods to the poor.