updated 1/28/2008 7:37:44 PM ET 2008-01-29T00:37:44

A top Senate Democrat unveiled a $156 billion economic stimulus package Monday that awards rebates to senior citizens living off Social Security and extends unemployment benefits, setting up a clash with President Bush and House leaders pushing a narrower package.

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Compared to the plan to be considered Tuesday by the House, rebates for most income earners would dip by $100 to $500 for individuals and by $200 to $1,000 for couples under the proposal by Senate Finance Committee Chairman Max Baucus. People would still receive an extra $300 per child, and even the wealthiest taxpayers would be sent a rebate.

The move was in defiance of admonitions from Bush not to risk derailing the deal with the House, and it threatened to slow what was shaping up as an extraordinarily rapid trip through Congress for the stimulus measure. The Senate hopes to pass its version by week’s end.

“My proposal will give America’s seniors the same rebate as any wage earner,” said Baucus, D-Mont. “The White House says we mustn’t slow the economic stimulus agreement down, or blow it up. I agree. We’re going to improve it and get it passed right away.”

Senate Majority Leader Harry Reid, D-Nev., said he supported the Baucus effort and stated his intention “to take legislation to the floor as quickly as possible to strengthen the economy.”

However, House Ways and Means Committee Chairman Charles B. Rangel, D-N.Y., warned that the Senate was “walking on very thin ice” with the proposal to send rebates to wealthier taxpayers, which he said could jeopardize the entire package.

“By eliminating the income cap, we would only further grow the divide between rich and poor that has already grown so much under President Bush’s policies,” Rangel said. Adding an unemployment extension or other spending such as food stamp, Medicaid or heating assistance could improve the plan, he said.

Bush and House leaders agreed last week on a proposal to provide rebates to 117 million families and to give businesses $50 billion in incentives to invest in new plants and equipment. The goal is to help head off a recession and boost consumer confidence.

Senate Republicans and Democrats — kept on the sidelines as House Speaker Nancy Pelosi, D-Calif., and Minority Leader John A. Boehner, R-Ohio, cut the deal with Treasury Secretary Henry M. Paulson last week — were eager to put their stamp on the high-profile package.

Sen. Mitch McConnell, R-Ky., the minority leader, urged senators to refrain from trying to swell the size of the package.

“A number of senators have expressed a desire to add tens of billions of dollars in spending on contentious programs to this package, but we don’t have the time for ideological debates. In order for this plan to work, Congress needs to act, and act at once,” McConnell said.

Republicans, though, were among those calling for additions to the plan.

“Many of these additions have bipartisan support, and I hope that the president will recognize that the White House needs to negotiate with the Senate as well as the House,” said Sen. Susan M. Collins, R-Maine, who backs both the rebates for seniors and the unemployment extension.

Sen. Olympia J. Snowe, R-Maine, a Finance Committee member, called the unemployment extension “critical” and said she supported ensuring that the rebates reached the elderly.

In another key difference, Baucus’ plan would send rebates to all Americans with earned income of $3,000 or more, while the House plan gives only partial rebates to individuals with adjusted gross incomes of more than $75,000 and couples with incomes in excess of $150,000, and no rebate at all to the wealthiest taxpayers.

Bush was pushing for Congress to move quickly on the agreement without additions.

“The president is concerned about efforts that would delay or derail the bipartisan package that was negotiated with House leaders,” White House spokesman Tony Fratto said. “The Senate is threatening to create partisan conflict by trying to put in additional programs.”

Still, pressure from the elderly and labor unions — both politically potent forces — spurred senators from both parties to call for the extras.

The House plan leaves out some 20 million seniors, according to the AARP.

The Senate measure includes a 13-week extension of unemployment payments for those whose benefits have run out, and a 26-week extension in states where the jobless rate exceeds 6 percent.

Including seniors who don’t pay taxes “is a good step,” said David Certner, AARP’s legislative director. He said senators were responding to a flood of elderly people who have contacted lawmakers about the stimulus plan and asked, “’Why aren’t seniors part of this rebate package? We’re hurting. We spend money.”’

The Senate measure also restores a business tax break dropped from the House bill that would permit corporations suffering losses now to reclaim taxes previously paid.

“This is a package in sync with the House bill but stronger and broader,” said Sen. Charles E. Schumer, D-N.Y. “We hope and expect it will get bipartisan support.”

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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