WASHINGTON — The Senate intends to introduce an economic stimulus plan today that is broader than the $150 billion package backed by President Bush and passed Tuesday in the House, potentially delaying tax rebates for millions of consumers and leaving the economy teetering on the brink of a recession.
Bush sent a strong warning to the Senate in his State of the Union address Monday night, signaling the much-needed boost to the economy could be delayed or derailed if lawmakers try to "load up the bill" with additional incentives.
The President also pressed Congress to approve free trade agreements with Colombia, Panama and South Korea in his seventh and final annual speech to the country. Bush faces significant opposition to those three pending trade pacts, as well as the rest of his domestic agenda, which has been overshadowed by public discontent over the war in Iraq and sent his approval rating into a downward spiral.
The economic stimulus package reached between Democratic and Republican House leaders and the White House is seen as one of the few areas where Bush might find common ground with Congress in his final year. The House plan, which passed on a vote of 385-35 on Tuesday, would provide tax rebates of up to $600 for individuals, $1,200 for couples and for those with children, and an additional $300 a child. The plan caps eligibility for the rebates at an income of $75,000 for individuals and $150,000 for couples. It would also provide $50 billion in business tax incentives for companies to invest in equipment.
The $156 billion plan unveiled Monday by Sen. Max Baucus (D., Mont.), chairman of the Senate Finance Committee, would provide $100 less per individual and $200 less per couple than the House package, but would broaden the coverage to include senior citizens living on Social Security and would not cap those eligible for rebates. Baucus' plan would include the same bonus of $300 a child and would also provide a 13-week extension of unemployment benefits and up to 26 additional weeks for those living in high unemployment states.
House Speaker Nancy Pelosi (D., Calif.), who spearheaded the compromise agreement with the administration, said in the House, "It is important in this package to have a level of discipline. It is important that this bill not get overloaded." Pelosi said she set aside some of her priorities to get a compromise and was satisfied with the results, a package that "puts $28 billion in the hands of 35 million families who have never received rebates or a child tax credit."Carol Guthrie, communications director for the Democratic staff of the Senate Finance Committee, said, "Chairman Baucus' view is that many senators wish to weigh in on an economic stimulus legislation, and the work that the finance committee is doing will provide an orderly process of addressing concerns and adding needed measures to the package, all while we work with the White House and with House leadership to move toward a final bill."
Even though the bills would have to be reconciled in conference if the Senate does not simply take up the House measure, Guthrie said Baucus believes the committee's action will speed up, not slow down, the passage of an economic stimulus bill, although she did not explain how.
While lawmakers battle it out on Capitol Hill, economists and business groups are closely watching for signs of a breakthrough that will move the legislation quickly to the President's desk.
"What we've said is we want Congress to act quickly in putting money in consumers' hands, particularly low- to middle-income Americans who are going to spend it and continue to keep the economy moving forward," said Steve Pfister, senior vice president for government relations at the National Retail Federation. "The House and Senate can have legitimate differences and can reconcile them, but the longer it takes, the less impact it is going to have, and if it gets too bogged down and people get too dug in, this entire thing could collapse, which is something we don't want to see."
Paul Nolte, director of investments at Hinsdale Associates, a boutique investment firm in Chicago, said, "I think we've seen a lot of retailers perk up in the last couple of weeks in anticipation of something like that being implemented."
Nolte said broadline retailers, including Wal-Mart Stores Inc., Target Corp. and Kohl's Corp., will benefit most from the anticipated jump in consumer spending. Despite a short-term boost for retailers, Nolte said the economy as a whole, which his firm has determined is in a recession, will not gain much from a short-term stimulus.
"In order to have consumer spending at any sustained level, you need a much lower level of personal debt," said Nolte. "What needs to happen in our opinion is a little more to address the issues of consumer debt. Unfortunately, you can't legislate that."
"'Dynasty' is all about gowns, the diamonds and the scandal, so it's a bit like the fashion industry. When we come to Cannes it's all about the red carpet dresses too, so it all fit really well," said designer @philippplein78 on the theme of his high-glamour resort 2019 show at his mansion in Cannes. #wwdfashion #cannes (📷: @zefashioninsider)
"I think Spike is such a brilliant director because he holds up a mirror to society and reflects these issues, yet he doesn't shove it down your throat, he doesn't tell you what to think," says @lauraharrier on her latest film @Blackkklansman. Harrier was at the Cannes Film Festival – for the very first time – with @officialspikelee. #wwdeye #cannes (📷: @zefashioninsider)
“I would think to myself, Are you happy? Yes, I’m wildly happy. I go to this studio every day and, in my inside voices, I’m giggling; I’m singing. Yes, it’s a lot of work, it’s a [huge] volume of material. It wouldn’t be for everybody. But I was very happy,” said soap opera star @therealsusanlucci of checking in throughout the years with her career trajectory. Lucci spoke to WWD about her decades-long career, love for pilates, motherhood and her QVC activewear line. Read Bridget Foley’s full piece on Lucci on WWD.com #wwdfashion (📷: @celestesloman)
@balmain has taken a stand at the #cannes Film Festival, dressing 16 actresses at a press call for the project “Noire N’est Pas Mon Metier,” or “Black Is Not My Profession.” The multimedia project includes a book, photo exhibit and documentary, which aims to expose discrimination in the French and American entertainment industries. “The moment I was asked to participate, I knew it was right for me, and for this brand, to form a part of this moment,” Balmain creative director @olivier_rousteing told WWD. #wwdnews #wwdfashion
"I always feel curious and I feel like there's more to learn. But I think being relevant, feeling relevant, I personally always feel that there's just so much more to know. And maybe that's the key.” — @themarcjacobs #wwdsummits #wwdbeauty (📷: @patrickmacleodphoto )
“The most amazing thing about her is that, regardless of all the things that have happened to her, her spirit is so undaunted by all of it. She is the most cheerful person you will ever meet. She doesn’t see problems, she only sees solutions,” said @ajanaomi_king of activist Ifrah Ahmed, who she plays in a new film “A Girl from Mogadishu.” WWD caught up with King at Cannes — Head to WWD.com to read more about her new role, personal style and how she uses social media for causes like Time’s Up and Black Lives Matter #wwdeye
WWD asked a number designers to share their thoughts on what Meghan Markle’s wedding gown will look like this Saturday. Here, Valentino’s Pierpaolo Piccioli sketches his look. #wwdfashion #royalwedding #meghanmarkle