WASHINGTON — A major economic relief bill that extends benefits to the jobless and expands a first-time home buyer tax credit took a step forward Monday in the Senate.
The Senate took a procedural vote that effectively blocked Republicans from trying to terminate at year's end the financial rescue plan known as the Troubled Asset Relief Program, or TARP.
Treasury Secretary Timothy Geithner can extend the $700 billion program beyond the end of the year, but Republicans say that authority should be taken away, arguing that Democrats are using unspent TARP money as a slush fund to pay for programs unrelated to financial stabilization.
A final vote is likely later this week.
The legislation, expected to win quick passage in the House once the Senate acts, contains a trio of measures backed by the administration to prevent the fragile economic recovery from backsliding and help tide people over until companies start hiring again.
* It provides up to 14 additional weeks of unemployment insurance benefits to out-of-work people whose benefits are running out. The jobless in 27 states where the unemployment rate is at 8.5 percent or above will get six weeks on top of that.
* The $8,000 first-time home buyer tax credit, part of the $787 billion stimulus package enacted last February and set to expire at the end of this month, would be extended through June, as long as buyers sign a purchase agreement by the end of April.
The proposal also makes available a $6,500 credit to home buyers who have been in their current residence for the past five years or more. There are also measures to help the IRS catch people trying to defraud the government.
* It would aid companies hit by the recession by expanding a law to allow money-losing companies to use losses incurred in 2008 or 2009 to get refunds of taxes paid in the previous five years.
The cost of the additional unemployment benefits, estimated at $2.4 billion, would be paid for by extending the federal unemployment tax that companies pay for each employee through June 2011.
Democrats would pay for the costs of the home buyer credit and net operating loss credit, each topping $10 billion over 10 years, by delaying enactment of a law giving international companies more leeway in how they allocate interest expenses between U.S. and foreign sources in determining tax liabilities.