Senate passes economic plan and sends to House

By Donna Smith and Richard Cowan

WASHINGTON (Reuters) - The U.S. Senate on Thursday passed an economic stimulus plan that would send government rebate checks to millions of Americans including retirees and disabled veterans to help lift the economy and stave off an election-year recession.

The Senate voted 81-16 in favor of the package, which will provide one-time rebates of up to $600 for individuals or $1,200 for couples plus $300 for each child. Low income people, including retirees on Social Security and disabled veterans who pay no income taxes, would receive checks of $300.

The checks could be in the mail within months.

The House of Representatives is expected to also vote on the package on Thursday and send it to President George W. Bush for his signature.

The Senate overwhelmingly agreed to the measure, which would inject more than $150 billion into the economy this year, after Republicans on Wednesday blocked a broader bill that would have provided more tax breaks for businesses and benefits for long-term unemployed people.

Senate Majority Leader Harry Reid, a Nevada Democrat, said the stimulus package approved by the Senate would "change the economic direction of this country" and added that lawmakers likely would do more this year to stimulate the economy.

The latest economic data suggest the U.S. economy is stalling. Pending sales of previously owned homes fell by 1.5 percent in December and were off a sharp 24 percent from a year ago, the National Association of Realtors said on Thursday.

At the same time the Labor Department said number of workers drawing jobless benefits has hit a 2 1/4-year high and major retailers reported a slowdown in consumer spending.  Continued...