Bills:HR 5140 — PL 110-185; HR 7110; S 3604

Status: Congress cleared a $151.7 billion economic stimulus bill in February that focused on tax rebates for families and individuals. Democrats promoted a second stimulus bill at the end of the session but could not bring enough Republicans on board to get it through.

Synopsis: Enactment of the stimulus bill was one of the few truly bipartisan accomplishments of the 110th Congress.

The package was the result of a deal negotiated by House Speaker Nancy Pelosi , D-Calif.; Minority Leader John A. Boehner , R-Ohio; and Treasury Secretary Henry M. Paulson Jr. It came at a time of slowing economic growth, rising unemployment and a collapse in the housing market that sparked rising concern about a recession. Leaders of both parties said that taxpayers and markets around the world were waiting for the U.S. government to take some action.

Pelosi and Boehner brought the bill directly to the House floor, bypassing the committee process. They called on members of their respective caucuses to line up behind the package, which passed overwhelmingly Jan. 29.

Despite intense pressure to clear the House bill, senators — particularly Democrats — insisted that the Senate have its say on the package. The Senate Finance Committee produced a broader bill with expanded rebates, more options for businesses, energy tax breaks and an expansion of unemployment benefits.

But lawmakers had set the Presidents Day recess as the deadline for completing the bill, and leaders of the two chambers reached a relatively quick compromise. The final bill was scaled back to resemble the House-passed version, but the provisions related to low-income seniors, disabled veterans and veterans’ survivors were kept.

The measure won the support of most Republicans and cleared a little more than a week after it was introduced.

The centerpiece of the plan was the rebates, which amounted to up to $600 for individuals and $1,200 for married couples. The rebates were phased out starting with individuals with more than $75,000 in adjusted gross income and couples with more than $150,000. Smaller credits were refundable, meaning checks were sent to many people whose incomes were so low that they paid little or no taxes.

The bill also provided write-off incentives to encourage businesses to invest in new equipment. It increased the size of mortgages that Fannie Mae and Freddie Mac could purchase and that the Federal Housing Administration could insure, with the aim of assisting some families in refinancing their mortgages and helping to stabilize the housing market, which had been roiled by the subprime mortgage crisis.

The Congressional Budget Office estimated that the bill would cost $151.7 billion in fiscal 2008, $16.3 billion in fiscal 2009 and $133.9 billion over six years.

Almost as soon as the first bill was enacted, Democrats began discussing the need for a second package that would focus on spending for infrastructure projects and aid to states that were struggling to fund Medicaid and other programs.

The House passed a bill (HR 7110) in September that would have provided $61 billion for a variety of programs, including highway construction, mass transit, state Medicaid programs and food stamps, as well as another extension of federal unemployment insurance. The Senate, however, rejected an effort to proceed to a similar bill (S 3604). But Democrats’ efforts to persuade Republicans to accept at least some of this spending during the November lame-duck session were unsuccessful.