Senators: Give tax rebates to disabled vets - Army News | News from Afghanistan & Iraq - Army Times

Senators: Give tax rebates to disabled vets

Whether disabled veterans with no taxable income deserve a $500 rebate as part of a bipartisan economic stimulus package is one of the disagreements holding up final passage of the $150 billion plan.

The House of Representatives, which worked out details of the stimulus bill with the White House, would exclude veterans and some low-income elderly people from getting the promised rebates because they have little or no taxable income. Because the rebate is considered a refund on income taxes, those who have not paid have nothing to get back.

The Senate Finance Committee, however, has taken a different approach, specifically adding disabled veterans making $3,000 or more in tax-free veterans’ disability income, as well as some low-income Social Security recipients, into the mix of people eligible for rebates.

Sen. Max Baucus, D-Montana, the finance committee chairman, said the Department of Veterans Affairs would distribute the rebate checks to disabled veterans under the committee plan.

“No one can question their sacrifice, no one can question their contribution and no one can question that they have earned the right to participate in this rebate program every bit as much as any other American,” Baucus said Thursday.

About 3.2 million veterans receive VA disability pay. Most would get a rebate under the House bill because they have enough taxable income to qualify, but about 250,000 would be excluded, said Sen. Blanche Lincoln, D-Ark., a supporter of the special veterans’ rebate.

Giving disabled veterans extra money will help jump-start the sagging economy, Lincoln said.

“They are either going to be spending it on food or a new pair of shoes. They are going to be taking care of their needs, maybe pumping money back into the economy in a multitude of ways,” she said.

The Senate could vote on its version of the stimulus package as early as Monday, but there will be an effort — probably by Republican leaders — to get the Senate to drop its version and pass the House bill, which would make rebates and other economic incentives available faster.

Senate Democratic leaders expect a close vote, and have delayed work on the bill until two Senate Democrats running for president — Hillary Clinton of New York and Barack Obama of Illinois — are available to vote on the measure.