Fortune Watch

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The $150 billion economic aid package on a fast track to passage in the House faces an uncertain future in the Senate, where lawmakers in both parties are seeking to tack on billions for senior citizens and the unemployed.

The House planned a Tuesday afternoon vote on its plan to speed rebates of up to $600-$1,200 to most income earners while giving tax breaks to businesses.A Senate panel was to vote Wednesday on a $156 billion version, which gives $500-$1,000 rebates to a broader group, including older Americans living off Social Security and wealthier taxpayers, and would extend unemployment benefits. Senate leaders hope to pass it by week’s end, said Jim Manley, a spokesman for Majority Leader Harry Reid, D-Nev.

The action put the Senate on a collision course with President Bush, who has cautioned against adding to a carefully negotiated package that brought together House Democrats and Republicans, both of whom surrendered cherished proposals to reach a deal. The White House and congressional leaders agree it is critical to enact an economic recovery package as soon as possible to help head off a recession and boost consumer confidence.

“The Senate is threatening to create partisan conflict by trying to put in additional programs,” said Tony Fratto, a White House spokesman.

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Stocks fell in Thursday after the assassination of Pakistani opposition leader Benazir Bhutto and after the Commerce Department reported a weak increase in durable goods orders. The Dow Jones industrial average fell more than 100 points.

Bhutto’s assassination raised the possibility of increasing political unrest abroad, always an unsettling prospect for investors. Oil and gold prices rose following the news.

Witnesses said a man fired at Bhutto from close range, quickly followed by an explosion that the government said was caused by a suicide attacker. At least a dozen more people were killed in the attack.

Meanwhile, the government said orders for durable goods — big-ticket items from commercial jetliners to home appliances — rose by just 0.1 percent last month. Economists had been looking for a rise of 2.2 percent. Still, November saw the first rise in durable goods orders in the last four months.

The notion that the economy is slowing was also unnerving for the market.

The Labor Department said the number of workers seeking unemployment benefits showed a surprise increase last week. Applications filed for unemployment insurance rose by a seasonally adjusted 1,000 to 349,000. Economists had expecting the figure would fall to around 340,000 for last week.

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Yesterday, the World Bank reported that the US has lost its status as the largest donor to the Bank’s main fund for poor countries, as Britain secured a record amount of aid with a pledge of increased funding.

Britain pledged $4.2 billion for the period from July 2008 through June 2011, after negotiations that began in March in Paris and ended with two rounds of talks in Berlin.

What does it mean to the US? Firstly, losing its position as the top donor could weaken Washington’s influence over the World Bank, which is the largest provider of development assistance to poor countries, and over policies that determine the cash flow.

The US pledged a very substantial contribution but is now down to second place after Britain,

A total of 45 donor countries, the highest number ever, promised a record total of $25.1bn at the Berlin talks, with a further $16.5bn coming from the bank and previous donor pledges. The total of $41.6bn represents an increase of $9.5bn over the previous funding period and will support around 80 countries, with a focus on African countries.

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Bush Economic Adviser Joins Aides Leaving White House As President’s Term Winds DownAl Hubbard, chairman of President Bush’s National Economic Council, will announce on Wednesday that he’s leaving his post, joining a growing line of top presidential advisers exiting the White House as the Bush administration heads into its final year.

Hubbard’s departure comes as Bush faces one of the biggest economic challenges of his presidency, a severe slump in housing and a credit crisis that have roiled financial markets and triggered fears of a recession.

Hubbard, assistant to the president for economic policy, will submit a letter to the president later in the day to make official his decision to leave the White House after three years, according to a senior administration official, who spoke on condition of anonymity because the announcement had not yet been made.

His departure, by the end of the year, continues an exodus of key Bush aides and confidants. Earlier this month, Fran Townsend, Bush’s terrorism adviser, announced she was stepping down after 4 1/2 years. Top aide Karl Rove, along with press secretary Tony Snow, Attorney General Alberto Gonzales, Defense Secretary Donald Rumsfeld and senior presidential adviser Dan Bartlett, have already left.

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