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The Treasury Department recently sent out the last batch of tax-rebate checks that Congress approved in February as part of an economic stimulus package that put $92 billion into consumers' hands. But when congressional and White House negotiators agreed on that package, they dropped various other ideas that lawmakers had proposed for helping the economy, such as boosts for unemployment benefits, utility bill subsidies, food stamps, and infrastructure spending. Many such proposals also failed to make it into the Iraq war supplemental appropriations bill that Congress passed in June.

Now, however, the continuing bad economic news--including the struggles of Fannie Mae and Freddie Mac, and the biggest monthly inflation spike in a quarter-century--have added fuel to congressional Democrats' plans to put together a second economic stimulus package in September. That means lawmakers will have one more shot to get their favorite domestic spending programs passed into law this year.

"The president said in February ... that he didn't want to do any of these other things--unemployment insurance, food stamps, [utility bill subsidies], aid to states--because he wanted to just do the rebates, he wanted to see how they worked," House Speaker Nancy Pelosi, D-Calif., told reporters after a July 15 meeting with economic experts at the Capitol. The rebates had "a positive effect," Pelosi added, "except they have been offset, as has been said by our experts, by the rising costs in other necessities for the American people. So while they may have saved the second quarter from a technical definition of a recession, the fact is that we are into a third quarter and we need to have another stimulus package."

In addition to giving members of Congress another chance to promote popular domestic programs, Pelosi's plan for a second stimulus package will give Democrats a vehicle for bashing President Bush's economic policies as the November elections draw closer. It could also give them a way to challenge presumptive Republican presidential nominee John McCain, whose advisers have been lukewarm to Democrats' stimulus ideas, while showing unity with presumptive Democratic presidential nominee Barack Obama, who this spring proposed a $50 billion stimulus package that includes more tax rebates and other spending.

And the plan gives the House and Senate something to do in September, especially since the regular fiscal 2009 appropriations bills seem to be going nowhere fast. Both parties in Congress favor limiting the agenda until after the election. Democrats prefer to wait to negotiate major legislation with a Democratic president next year. They have instead focused on placing blame for the country's economic problems at the GOP's feet. Republicans are similarly focused on the campaign. They are pushing two main election-year messages: that Democrats want to raise taxes next year, and that Republicans--not Democrats--support more domestic oil drilling that could lower gas prices.

"If the speaker is serious about taking action to stimulate the economy, she should start by allowing a vote on increased American energy production," House Minority Leader John Boehner, R-Ohio, said in a July 15 statement. "The Democratic majority's destructive tax hike and energy policies have brought our economy to a screeching halt and sent prices at the pump soaring."

Amid the election-year campaigning, however, another stimulus package could potentially become law in the fall. Bush and Democratic leaders did manage to agree to the first economic stimulus package and the midyear supplemental, which included funding for the war, new college aid for military veterans, and an extension of unemployment benefits. They also agreed on a revamp of the Foreign Intelligence Surveillance Act and are on the brink of agreement on a housing rescue package. In addition, Democrats and Republicans in Congress joined forces to override several presidential vetoes this year, allowing the farm bill and a Medicare physician payments bill to become law over the White House's objections.

Bush, pointing out that this year has seen several major legislative accomplishments, signaled a willingness on July 15 to consider a second stimulus package. "We're always open-minded to things," he said, although he added that he would first like to see the results of the first tax rebates. "Let's see how this stimulus package works."

An initial gauge of the rebates' effectiveness will come at the end of July, when the Commerce Department announces advance estimates for the economy's growth or decline in the second quarter of this year. A decline would certainly bolster the outlook for another stimulus package, as would weak growth. The previous two quarters saw lackluster growth--0.6 percent and 1 percent. Additional indicators, including monthly inflation and unemployment figures, could also improve the chances for another bill. Unemployment figures released at the beginning of June, for example, helped proponents attach the $11 billion in additional jobless benefits to the supplemental bill.

The second-quarter economic numbers have important political consequences as well. Many political scientists contend that growth in the second quarter of 2.6 percent or higher is almost always a guarantee that the president's party will win the White House in the fall, while growth of 1.5 percent or less means that the opposition party will win. Growth in the higher range could bolster Republicans' flagging confidence about their election prospects and make them less likely to support compromise on a stimulus package. Growth in the lower range may increase Democrats' confidence to push for a larger package and increase rank-and-file Republicans' willingness to support something they could tout at home to protect them from voters' ire about the economy.

Lawmakers have already begun to jockey for a place in the next stimulus bill. By scheduling a July 24 markup, Senate Appropriations Committee Chairman Robert Byrd, D-W.Va., assured his panel's members of having a chance to offer ideas.

Sens. Tom Harkin, D-Iowa, and Arlen Specter, R-Pa., the chairman and ranking member of the Appropriations subcommittee charged with health programs, have already proposed a $5.2 billion boost for the National Institutes of Health. Sen. Barbara Mikulski, D-Md., is pushing for increases in local law enforcement grants, while Sen. Dianne Feinstein, D-Calif., wants more money for Western wildfire fighting. Sen. Mary Landrieu, D-La., is seeking billions of dollars for the Gulf Coast on top of several billion that Congress included in the supplemental.

The Appropriations Committee will sweeten the pot for Republicans to support the bill. The low-income heating assistance program, which helps the poor pay their utility bills, usually draws bipartisan support from Northern lawmakers. Additional spending for highway projects could garner GOP votes from numerous states. The committee could attract votes from retiring Republicans, such as Sen. Pete Domenici of New Mexico and Larry Craig of Idaho, by including measures that would benefit their states. The bill could also become a vehicle for some of the measures that Senate Finance Committee members unsuccessfully sought to add to the initial stimulus package, including energy-tax incentives supported by Sens. John Ensign, R-Nev., and Maria Cantwell, D-Wash.

In the House, Appropriations Committee Chairman David Obey, D-Wis., likewise told reporters during debate on the supplemental that he supported a second economic stimulus package. Obey has a list of 110 proposals that lawmakers requested for inclusion in the supplemental that could now be added to a stimulus bill. "I've certainly got a number of items that I would like to see added to this," Obey told reporters this spring. "The pressure will grow over the summer to do some of those things."

Obey will also have to negotiate an endgame for the fiscal 2009 appropriations process before the new fiscal year starts on October 1. Since neither the House nor the Senate has passed any of the 12 appropriations bills, the most likely scenario is a continuing resolution to keep the government operating. The CR must pass, meaning that the second stimulus package could get attached to it. A key point of contention will be the CR's length. Democrats have said they will push for funding through the spring--until Obama is potentially in the White House. Bush, however, could demand shorter continuing resolutions to force Democrats to negotiate over what's included.

Pelosi said on July 15 that any items included in the second stimulus package must meet her definition of "timely, targeted, and temporary"--a limit that Federal Reserve Chairman Ben Bernanke endorsed at a hearing of the Senate Banking, Housing, and Urban Affairs Committee.

"If additional stimulus is, in fact, invoked, it would be important to find programs that would be, as in the first round, timely, temporary, and targeted--in particular, that would take place quickly and would put money into the economy relatively quickly," Bernanke said. Lawmakers will spend the next few months trying to convince their colleagues that their ideas meet that definition.