WASHINGTON —Senator John Kerry (D-Mass.) welcomed the Senate passage of the Senate Finance Committee’s Economic Stimulus Package today. The bill is a strong response to America’s recent economic downturn, and will strengthen America’s economy by keeping more Americans in their homes, delivering relief to 20 million seniors and lending support to 250,000 disabled veterans. Unlike the House bill, the Senate package includes a rebate for seniors and disabled veterans, while extending unemployment benefits at a time when unemployed Americans need that protection most.

“This is a victory for struggling homeowners, the elderly, and veterans, who are most vulnerable to the economic downturn,” said Kerry. “The economic stimulus package we passed stands up for people who have worked all their lives to make this country strong and fought hardest to protect our freedom.”

Kerry wrote to Finance Committee Chairman Max Baucus and Ranking Member Charles Grassley to ask that the package protect seniors and low-income groups, who have different financial obstacles than middle class America.

Kerry’s original letter is below:

January 24, 2008

The Honorable Max Baucus
Chairman
Committee on Finance
United States Senate
Washington, D.C.  20510

The Honorable Charles Grassley
Ranking Member
Committee on Finance
United States Senate
Washington, D.C.  20510

Dear Chairman Baucus and Ranking Member Grassley:

In light of the announcement that the Finance Committee will hold a mark-up on an economic stimulus package, I want to raise some concerns I have about the House proposal and its ability to achieve the economic results that Americans are counting on.

First, the House has proposed rebates for all individuals with earned income, but the rebates are higher for individuals with tax liability.  Yet, at this morning’s Finance Committee hearing, Dr. Martin Feldstein, Baker Professor of Economics at Harvard University, testified about the stimulus benefits of a cash transfer to low-income groups who are not taxpayers. I believe the Committee’s stimulus proposal should reflect the concerns Dr. Feldstein raised about how best to jumpstart the economy and target those most in need of a cash infusion.

Second, I am concerned that the House proposal leaves out many of our senior citizens -- including those who live primarily on Social Security benefits.  According to the Bureau of Labor Statistics, individuals over age 65 are responsible for 14 percent of all consumer spending.  The spend-out rate for senior citizens is higher than any other demographic group, with the exception of those under age 25.  Seniors spend a higher portion of their income on health care than do other age groups, but they spend 88 percent of their income on the same types of goods and services that are purchased by those under age 65.  Indeed, seniors spend about 11 percent of their income on food and 31 percent on housing expenses, percentages that are slightly higher than those for all age groups.

As you develop the legislative language of the economic stimulus package, I urge you to structure the rebate so that we do not unfairly penalize millions of seniors who are faced with the same economic strains as young families, but do not have the ability to increase their incomes. I look forward to working with you on this issue as the Finance Committee crafts a sensible, effective stimulus package.

Sincerely,

John F. Kerry

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