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Senate approves US economy plan Senate approves US economy plan
(about 1 hour later)
The US Senate has approved an economic stimulus plan that will provide extra money to retired people and veterans. The US Senate has passed a $167bn economic stimulus plan aimed at helping to bolster the world's largest economy and avoid a recession.
Aimed at helping to bolster the economy and avoid a recession, the plan is expected to be quickly passed by the House of Representatives. The package includes one-off rebates of up to $600 for individuals and $1,200 for couples plus $300 for each child.
A day earlier a more generous version of the plan than that proposed by President George W Bush failed to find enough support in the Senate. Senators voted to approve measures after a week of manoeuvring that saw agreements to provide extra money to retired people and the elderly.
The credit crunch and housing market woes have dented the US economy. House of Representative approval for the bill is expected imminently.
The package, which won overwhelming support, includes providing one-off rebates of up to $600 for individuals and $1,200 for couples plus $300 for each child. Fast action is needed, politicians say, to limit the damaging effect on the economy that the credit crunch and housing market woes are having.
Those on low incomes, who do not pay income tax, would receive a $300 payout. 'Direction change'
The moves add about $6bn to a $161bn plan which was passed by the House last month. As well as the tax rebates, those on low incomes, who do not pay income tax, would receive a $300 payout, senators agreed.
The new measures were passed in a vote by 81-16, but only after Democrats dropped calls for more unemployment benefits, assistance with fuel bills and plans to offer certain industries tax breaks.The new measures were passed in a vote by 81-16, but only after Democrats dropped calls for more unemployment benefits, assistance with fuel bills and plans to offer certain industries tax breaks.
The approved package would "change the economic direction of this country", said Senate Majority Leader Harry Reid, a Nevada Democrat.
However, some politicians are worried about the damage the plan will do to government finances - potentially doubling last year's budget deficit.
"We have to remember that every dollar being spent on the stimulus package is being borrowed from our children and our children's children," said Republican Senator Judd Gregg, who voted against the bill.