The package would make individuals with annual incomes of up to $150,000 and couples with incomes up to $300,000 eligible for the rebates. Qualifying families would also get $300 for each child.
The Senate Finance Committee approved the measure on a bipartisan vote Wednesday, and senior aides said the Senate could begin voting on it as early as Thursday in hopes of completing it by week's end. Americans could begin getting rebates in May, with the bulk expected to arrive in June.
The income limits compare with caps of $75,000 for individuals and $150,000 for couples in an economic stimulus bill the House passed on Tuesday.
They were part of a bill written by Sen. Max Baucus, D-Mont., the Finance Committee chairman, and backed by Charles Grassley of Iowa, the panel's senior Republican, which would pump $193 billion into the economy over the next two years. The House measure would inject $161 billion.
The Senate plan also would expand rebate eligibility to 20 million older Americans on Social Security and to disabled veterans and tack on an unemployment extension for those whose benefits have run out.
"It helps seniors and it helps those hit hardest by the economic downturn," Baucus said of his plan.
He said it could win quick approval and be ready for enactment by Feb. 15.
"This cannot be loaded down," Grassley said, "or it is likely to sink."
Baucus originally proposed to let even the richest taxpayers share in the rebates, saying that would attract Republican support for his measure. Grassley said that lifting what some Republicans deemed "suffocating income limits" in the House plan was a key reason he was backing the bill.
But Senate Democrats balked at the idea of wealthy people - including lawmakers - getting rebate checks. Baucus' new proposal expressly bars members of Congress from getting the checks.
It also goes further than the House package in efforts to bar illegal immigrants from receiving rebates. Under the Senate measure, recipients and their spouses and children would have to have valid Social Security numbers to qualify. The House bill omits that requirement, although it expressly disqualifies nonresident aliens.
In backing the bill, Grassley broke with President Bush and Senate GOP leader Mitch McConnell of Kentucky. Both have said the Senate should simply pass the House-passed stimulus measure.
Grassley told Iowa reporters that he believed the Senate would act quickly on the measure and that he and Baucus would team up to try to block further amendments to the bill.
"If Baucus and I can work together, we can keep amendments down, keep it from becoming a Christmas tree," Grassley said.
The bipartisan Senate package faced challenges from the left and right. Democrats and some Republicans said Wednesday they would move to add money for food stamps and heating aid for the poor.
"We have to thread the needle here. We want to improve the bill, but we don't want to move it so far from the House bill that we slow it down," said Sen. Charles Schumer, D-N.Y.
White House deputy press secretary Tony Fratto, traveling on Air Force One to California with President Bush on Wednesday, said the disappointing fourth-quarter growth rate should give the Senate greater urgency to pass the bill.
"We'd like to see some leadership that will encourage members to put away some of their pet ideas and think about the bigger picture," Fratto said.
Grassley said he does not support $14 billion in additional unemployment insurance for workers whose benefits have run out, but he was willing to go along in exchange for Democratic concessions such as lifting the House-passed income limits.
Baucus' measure would extend unemployment payments for 13 weeks for those whose benefits have run out, with 26 more weeks available in states with the highest unemployment rates. The only state that currently meets the trigger is Michigan.
The Senate plan would restore a business tax break dropped during the House negotiations that would permit corporations suffering losses now to reclaim taxes previously paid.
Both packages include roughly $50 billion worth of tax incentives for businesses to invest in new plants and equipment. Baucus' plan also adds $5.5 billion in renewable energy tax incentives.
Some Republicans criticized the package as shortsighted and ineffective.
"Giving people tax rebates and telling them to go shopping will do virtually nothing to stimulate the economy," said Sen. Jon Kyl, R-Ariz., "Only a permanent reduction in taxes will do that."
