Senate committee passes economic stimulus package

WASHINGTON (CNN) -- The Senate Finance Committee on Wednesday passed an economic stimulus package that would inject close to $200 billion into the economy over two years in an attempt to stave off recession.

It could go to the Senate floor Wednesday night or Thursday.

The Senate version originally included no income ceiling.

But committee leaders changed their minds Wednesday, capping eligibility at $150,000 for individuals and $300,000 for couples after Democrats objected to the idea of giving a rebate to wealthy Americans.

During Wednesday's committee meeting, Chairman Max Baucus of Montana announced that the proposal is similar to a bill passed Tuesday by the House.

But some key differences include the eligibility caps, which are double those in the House version.

The Senate proposal calls for rebate checks of $500 for individuals, $1,000 for couples and $300 per child to filers with at least $3,000 income -- less than the $600 for individuals and $1,200 for couples in the House bill.

The Senate bill also allows Social Security income to count for earned income, a move that would add about 20 million senior citizens to the list of those who would get rebates. It would also offer rebates to 250,000 disabled veterans who wouldn't qualify for them under the House plan.

"If we want people to spend money, it makes sense to give rebates to as many people as possible," Baucus said. Watch how economic stimulus options work »

The Senate bill also extends unemployment insurance benefits, he said.

In all, two-thirds of the total would go to rebates, and the other third for business investment and depreciation.

Ranking member Sen. Chuck Grassley of Iowa called the Senate bill "a much-improved version" of the House's.

He noted that many Republicans oppose extending unemployment benefits, but he said he would back extending benefits "to keep a bipartisan package together."

But President Bush backs the House version, which aims to inject $145 billion into the economy, and urged the Senate to abandon its efforts to pass a different measure.

"Whatever the Senate does, they should not delay this package. They should not keep money out of your pocket," the president told employees at a California plant that builds helicopters.

"If they're truly interested in dealing with the slowdown in the economy, the Senate ought to accept the House package, pass it and get it to my desk as soon as possible." Watch Bush say he's confident about the economy »

Baucus noted the Federal Reserve lowered its interest rates Wednesday by half a percentage point, but said that will not suffice to kick-start the nation's flagging economy.

"It did not address the underlying fundamental fiscal needs," he said. "Rebate checks are going to help put money in consumers' pockets and spend it, which is a much more fundamental need now."

At the Real Estate Roundtable's state-of-the-industry meeting, Treasury Secretary Henry Paulson predicted that, if Congress acts "within a few weeks" to send the president a bill he will sign, "rebate payments would start in May."

He applauded congressional leaders for cooperating with each other on the matter. He likened the House approval on Tuesday to "the speed of light," and predicted the next few weeks will be equally productive. E-mail to a friend

CNN's Ted Barrett contributed to this story.

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