2008 Tax Stimulus Package: Senate & House Differences

Email  Print Print  

If you’ve been following the latest on the economic stimulus package (or tax stimulus package), you’ve probably learned that we’re all waiting on the Senate to approve a bill that is similarly worded to the House’s H.R. 5140, the Recovery Rebates and Economic Stimulus for the American People Act of 2008 (great bill name!). Rather than outline the Senate version and assume you’ll be able to tell the difference, let me just explain the differences.

Incidentally, the latest news is that Senate Democrats can’t get the 60 votes necessary to move past debate (a step known as cloture) on the bill they’ve outlined so a vote will likely have to wait until next week – if ever. If things stall, they will accept the House version.

Latest news is that the Senate has passed its version of the bill, explained below!

Biggest Differences:

The biggest difference is in how the rebate amount would be determined. In the Senate version, individuals would get $500, couples would get $1,000, plus $300 per child with no income cap. The House version was $600 to individuals, $1,200 to couples, plus $300 per child but included caps at $75k for singles and $150k for couples. The removal of a cap also means that two large categories overlooked by the House’s plan would now get a tax rebate: retirees living on Social Security (~20M) and veterans dependent on government benefits (~250k). Those two groups are left out of the House plan because they didn’t meet the income tax paying qualifications.

Some other differences are that the Senate version would extend unemployment benefits an additional 13 weeks beyond the current limit of 26 weeks (something House Democrats tried to get but dropped in negotiations) and it would drop the increase on the dollar limit of conforming mortgages insured by Fannie Mae and Freddie Mac. (This was ultimately removed from the bill the finally passed the Senate)

There’s been talk about how if the Senate isn’t able to reach an agreement soon, that they’ll defer to the House’s bill. I personally think that including retirees and veterans, those missed by the House version, is crucial but the lack of a cap starts giving a money to folks who don’t really need it. While this is about stimulating the economy, I think a greater percentage of the stimulus would get spent if it were given to those on the lower end of the earning spectrum.


{ 41 comments, please add your thoughts now! }

Related Posts

RSS Subscribe Like this article? Get all the latest articles sent to your email for free every day. Enter your email address and click "Subscribe." Your email will only be used for this daily subscription and you can unsubscribe anytime.

41 Responses to “2008 Tax Stimulus Package: Senate & House Differences”

  1. Eden says:

    Great work publishing these details!

    It seems terribly wrong to overlook retirees and veterans. It also seems like there should be a cap, but I think you could argue that $75K salary isn’t very much in certain parts of the country. I think a higher cap and including the retirees and veterans would be the way to go.

    Or just not do this at all- I think that is the better option, though not as popular.

  2. Steven says:

    It depends on your point of view. If you are looking at a government “giveaway” then including seniors and veterans is the right thing to do (as an aside, I find it ironic under the House plan that people who pay no taxes can get a “rebate” anyway – how is it a “rebate” ???).

    But I think the more fair thing is to give people who paid the money into the system in the first place a chance to get some of it back.

    Otherwise, you have a grand redistribution of wealth (= socialism).

  3. Thermopyle says:

    but the lack of a cap starts giving a money to folks who don’t really need it.

    I think instead of “giving” you mean “letting them keep”.

  4. Traciatim says:

    Everyone should be buying the stocks of Alcohol and Tobacco companies, I bet their earning in the quarter that the rebates get handed out will be THROUGH THE ROOF!

    All jesting aside, I would really like to see some weekly stats on sales of ‘sin’ companies like the gaming industry, alcohol, and tobacco companies. It would be interesting to see how many have elevated sales that week and the next.

  5. MoneyNing says:

    I am happy about that because it means I get money that I wouldn’t have gotten. However, I would probably save the money instead of spending it.

    The original package is probably better for stimulating the economy.

  6. JRich says:

    Is thinking both options are stupid an option? I’d stand to get $1800 or $1600 from the House or Senate versions, respetively. They need to considder 2 simple things.

    1) Give money to people who are going to spend it.
    2) Don’t encourage people to not work.

    My AGI is about $75k and i think I shouldn’t get anything. No way would I spend it (and I’d argue that most reading are thinking about where the’d invest or save at least some of it). So, here’s the JRich stimulous package

    1) 600/1200/300 (like the house)
    2) phased out after $30k (to $40k) individual or $60k (to $80k) family
    3) no extended unemployment benefits becaseu that is retarded.
    4) include people with no earned income (incl. retirees) but include that in the income limits.
    5) include people only on social security and don’t limit it by people not making enough income

    The point is, its not about who has earned it or not. Its an ecomomic freakin’ stimulus package. Its about getting money in the hands of people that are going to spend it.

  7. MonkeyMonk says:

    I don’t qualify for either package but I’d be willing to sign a pledge saying that I promise to spend the money. Hell, I’d even sign a pledge promising to spend the money on *American* merchandise. Would an Xbox 360 count?

    Seriously though, I think the whole stimulus package idea is a silly one. I think they would do much better to focus on the roots of the problem rather than wasting a ton of borrowed money on a very temporary fix.

  8. Tim says:

    I agree with JRich about the two points to consider.

    The thing to consider, though, is that even if people won’t spend the money directly, and invest it instead, this still gives indirect jolts to the economy. The companies you invest in now have increased cash flow to do what they do best, which is also spend.

    The government also spends money, which it would have done with the money that it is planning on giving back to all of us; however, the biggest difference is that the government can simply print more money or borrow more to do its spending, whereas most consumers will not be able to borrow more to do their spending.

    i’m not sure the arbitrary numbers of $600/$1200. the stimulus plan is about 1% of our economy, which begs to reason how that would do anything.

  9. Hurry Up!!!! says:

    I like the idea of getting back some of what I put in. However I dont think that people making $300,000.00 need more, Yet the vets do. Leave it at 600/300 give to s.s and vets and leave out the higher class. Simple as that. Dont need to be a rocket scientist to figure this out. Believe this some of mine will go to bills and the rest on a nice new Plasma TV so that I can catch up with the rest of the world!! Have a nice day.

  10. Politicians suck says:

    I think the whole tax rebate thing is pretty stupid and nothing but election year politics. This is not an efficient way to help jump-start the economy.

    Anyhow, I am one of those people who would not get a dime in the House version. Yet I paid several hundred thousand (you heard me right) in federal taxes in 2007. How is it that I should be left out of the rebate? The point of the rebate is not to determine who is worthy? It’s not about giving money to people who need it. Someone making $75K does not “need” another $1000. Sure, it might be nice, but its money nobody was counting on in order to feed and cloth themselves. I’m pretty sick of this whole “need” question. Unless you’re living below the poverty level, you don’t “need” a rebate.

    The idea was to rebate the money to people who will spend it. Well, I will spend it. I already save enough. I’m already wealthy enough. If you hand me $1000 or whatever and tell me to spend it, I am not going to run over to the bank deposit it. I’m spending it! Better yet, how about handing me back my entire tax bill, and I promise to run right over to the Bentley dealer. Deal?

  11. WorkingRich?! says:

    This stimulus package is like a band-aid on a chest wound. It does nothing to solve the underlying problem and actually makes it worse! Our deficient is out of control and we keep going to the global bankers in China, Japan, and other countries to bail us out. What happens when they want their money back? We need to seriously halt all this spending and figure out a plan for the future that requires an overhaul of all our current programs; medicaid, medicare, social security, and all the other programs. The truly poor aren’t getting help, and the lazy members of society are benefitting the most from programs designed for the needy. As for the house versus the senate bill; let’s pick neither. Just lower the overall tax rates so we can all decide how to save or spend our own money.

  12. Anonymous says:

    Don’t try to cut ones blessing off just because you are not in the running for a rebate…If you make that much and already have some save then you don’t need to take that 1,000 and spend it take a 1,000 out your bank account and spend that.

    I am one that needs it and really looking forward to spending it after I pay my tithes. I am osorry you are not in the running however if you were I would be happy for you. It wouldn’t be stupid if you were getting a rebate check but now it is stupid

  13. Politicians suck says:

    @8:18 – The govt really has no business giving a rebate to anybody. It is simply political pandering. If the idea is for people to SPEND the money freely, then by that logic, it should go to the two economic extremes – the poor and the rich. The poor will spend it because they need to. The rich will spend it because… well… because saving a $500 – $1500 is not going to make much difference to them, so they’ll spend it. It’s the folks in the middle who will try to screw things up and save it, especially people who read personal finance blogs. Those party poopers should get no rebate at all (half joking in case its not obvious).

    Seriously though, you are forgetting the fact that high income people pay more than their fair share of taxes. Its something like the top 20% pays like 80% of all the income taxes (forgive my numbers but it’s definately in that magnitude). It would be unfair to stiff ANY bonafide taxpayer on a TAX REBATE program. If you pay taxes, you should get a rebate. That would be fair. It’s not for you or the govt to decide if I need it or not. The govt took a bunch of my money and if they are giving some back to people, then they should give it back equally (preferably in the same proportion you paid).

    If you’re looking for a welfare handout, well then that’s another conversation altogether.

  14. Deborah says:

    You did not mention head of household. Secondly, what if I have a dependent child in college, does that count?

  15. Lee says:

    This is my first visit here. I enjoyed reading more details about the Stimulus package. I agree that it should include every legal tax-paying citizen. In the last tax rebate a few years ago that President Bush initiated, we didn’t get a check from the government. I believe it was because we file self-employed, and only had to pay the self-employment tax (SE), and ended up not owing a federal tax. To me, paying the SE is the same as paying the other taxes, and we had to file all the forms just like everyone else.

    Do you have any information (or maybe an educated guess) about whether we would receive a check with this current Stimulus package? I believe you said the Senate passed the package, and it would include the seniors and veterans. Are all filers included? I wasn’t sure if you had that info in your article….thanks for getting the news out here for the public. I’ll definitely be back to read further.

  16. michaelra84 says:

    I just want my money. Can we please just get rid of the IRS? Please. I want MY money.

  17. dan_g says:

    According to the latest statistics published by the IRS, the top 25% of income earners pay 86% of federal income taxes (up from 84% in 2000). The top 50% pay 97%.

    I think it’s more than a little humorous to call it a tax “rebate”. The only people who will be eligible for the rebate haven’t paid any income taxes!

    This is just another way for the government to play Robin Hood. If they want to have a real effect on the economy, make Bush’s tax cuts permanent.

    And for those of you who think Bush’s tax cuts were just “tax cuts for the rich”, think about this: when Bush took office in 2000 — before the tax cuts — the top 1% were paying 37% of federal income taxes. Now, after the tax cuts “for the rich”, they’re paying 39%. Think about that.

  18. sfliflet says:

    It concerns me that people are treating this like “free money,” you will see the hit for this while doing your 2008 taxes, be sure!

    An amount that low per family is going to do little to assist individuals/families facing foreclosure or serious credit card debt, which are two factors that are DRIVING us toward recession!

    With the cost of gas/heat this winter, I wish they would sign my check over to the oil companies/Bush family immediately. Eliminate me as the middle man.

    Anyone seen the tally on our national debt lately? How’s Social Security doing? Thank god we can afford to throw money around…

  19. I like money says:

    We stand to get $2100/$1900 depending on which bill passes. You can bet I will be spending it. Mostly on home improvement. I like the idea of including retirees and vets. However, I hate the idea of giving money to the rich, or even the very poor who get $5000-$6000 in tax “rebates” anyway. They just waste it and now we will add more? My husband and I pay taxes, we have 3 children, and a nice house and vehicle. That takes money. While my ex-husband lives in a camper on a campground with 6 kids and gets more than $6000 at tax time and drives a cab, paying no taxes at all. Nor does he pay child support. I love the idea of this stimulus plan, but, there needs to be some common sense used. Give money to the middle class that carries everyone elses taxes. The rich seem to find all the loopholes and the poor pay nothing and get tons back. We pay and pay with little on our returns. I think, both plans need re-evaluating.

  20. LINDA says:


  21. lou says:

    They need to be reducing our national debt by stopping some of the benefits especially those given to none citizens. All this will do is increase our debt. and make things worse for our children and grandchildren.

  22. Marc T says:

    “Give money to the middle class that carries everyone elses taxes.”
    Guess you diddnt read the post above!

  23. david juneau says:

    There appears to be some misinformation out there on this new bill, as to earned income, phase out income and the year it applies.

    The following is the relevant portion [with my bracket added for clarification] for individual income taxes.

    “IRC code section 6428

    In General- In the case of an eligible individual [those receiving at least $3,000.00 from earned income, OR SSB, OR a distribution from a qualified deferred accounti.e. pension, IRA], there shall be allowed as a credit against the tax imposed by subtitle A for the first taxable year beginning in 2008 an amount equal to the lesser of–

    `(1) [2007] net income tax liability, or

    `(2) $600 ($1,200 in the case of a joint return).

    Special Rules-

    `(1) IN GENERAL- In the case of a taxpayer described in paragraph (2)–

    `(A) the amount determined under subsection (a) shall not be less than $300 ($600 in the case of a joint return), and

    `(B) the amount determined under subsection (a) (after the application of subparagraph (A)) shall be increased by the product of $300 multiplied by the number of qualifying children (within the meaning of section 24(c)) of the taxpayer.

    `(2) TAXPAYER DESCRIBED- A taxpayer is described in this paragraph if the taxpayer–

    `(A) has earned income of at least $3,000, or

    `(B) has–

    `(i) net income tax liability which is greater than zero, and

    `(ii) gross income which is greater than the sum of the basic standard deduction plus the exemption amount (twice the exemption amount in the case of a joint return).”

    [Bottom line is you get $300 (or $600) plus the child credit, if you are eligible person EVEN if you didn’t pay taxes or didn’t have taxable income.

    The phase-out is based on “AGI” for the 2007 tax year- NOT on taxable income, NOT on earned income. See below]

    “Limitation Based on Adjusted Gross Income- The amount of the credit allowed by subsection (a) (determined without regard to this subsection and subsection (f)) shall be reduced (but not below zero) by 5 percent of so much of the taxpayer’s adjusted gross income as exceeds $75,000 ($150,000 in the case of a joint return).”

    Good luck to all.

    David R. Juneau

  24. Prasad says:

    I guess there is phase out after 150 K and if you earn 174 K and above you will get 0 dollars. so no $$$ for me.

    I am not getting any $$ because Senate version (original) got rejected just by 1 vote. I held repulibcans responsible for this and I am not voting to reps in my life.

  25. Rick says:

    Your comment, ‘but the lack of a cap starts giving a money to folks who don’t really need it’ is not well thought out. For those of us just above the cap, with children and a mortgage, we can certainly use the rebate. After all, if we made more money than those included in the rebate, didn’t we also pay more taxes than they did?

    No matter which way you look at it, my family, and many other middle income families like mine, got the short end of the stick.

Please Leave a Reply
Bargaineering Comment Policy

Previous Article: «
Next Article: »
Advertising Disclosure: Bargaineering may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website.
About | Contact Me | Privacy Policy/Your California Privacy Rights | Terms of Use | Press
Copyright © 2016 by All rights reserved.