Senate Leader Seeks Smaller Economic Stimulus
Tuesday January 22 8:49 PM ET
By Donna Smith
WASHINGTON (Reuters) - Aiming to break the impasse over
an economic recovery plan, U.S. Senate Majority Leader Tom
Daschle on Tuesday proposed Congress enact a scaled-back
package of employment and tax provisions that enjoy broad
bipartisan support.
In a letter to President Bush (news - web sites), the South Dakota Democrat
outlined the new plan to ensure the economy recovers quickly from recession.
It would include 13 weeks of extended unemployment benefits, tax rebates for
those who did not receive one with last year's $1.35 trillion tax cut, a one-year
bonus depreciation for businesses to help them write off purchases of computer
and other equipment faster and financial aid for cash-strapped states.
``Because it is so important to get our economy growing again, I propose to put
before the Senate a package of noncontroversial economic provisions,'' Daschle's
letter said.
Daschle's proposal would cost the federal treasury $69 billion this year and $7
billion next year, far less than a more sweeping multiyear stimulus plan backed
by Bush and congressional Republicans.
Senate Democratic leadership aides said Daschle would probably discuss the
proposal with Bush when congressional leaders meet the president on
Wednesday morning to talk about the legislative session that starts later in the
day.
The White House reacted carefully to Daschle's proposal, neither embracing it
nor dismissing it out of hand.
``The president has been working on a bipartisan approach and he believes it is
important for the Senate to pass a comprehensive economic package that
encourages job growth and provides unemployment assistance for workers who
have lost jobs,'' said White House spokesman Scott McClellan.
Senate Republican Leader Trent Lott also sent a letter to the president calling
Daschle's proposal ``encouraging'' but said it does not go far enough.
'ENCOURAGING DEVELOPMENT'
``This is an encouraging development, and one which leads me to believe that we
may be able to move this process along toward economic recovery legislation
which you can sign in the near future. I believe, however, that we need a more
comprehensive solution than this new proposal,'' the Mississippi Republican
wrote.
``While a 'least common denominator' approach may be sufficient to break the
Senate logjam, it does an American worker little good if it doesn't create an
environment in which people who want to work can find work,'' Lott said.
Bush has made a top issue of a stimulus plan needed to lift the economy out of a
recession made worse by the Sept. 11 attacks on Washington and New York. He
blames Senate Democrats for failing to bring a Republican-backed plan to a vote
in the Senate. Senate Republicans successfully blocked a Democratic-backed
stimulus plan in November.
Shortly before breaking for the Christmas holiday, the Republican-controlled U.S.
House of Representatives passed a multiyear stimulus plan that would have cost
the federal treasury more than $200 billion over five years.
Sen. Charles Grassley (news) of Iowa, the senior Republican on the Senate
Finance Committee, said he wants the Senate to vote on the House-passed bill,
which is backed by Bush, before voting on a scaled-back plan. Lawmakers have
said the Republican-backed bill is unlikely to win the 60 votes that will be needed
to overcome Senate procedural hurdles.
The House bill included more generous tax breaks for businesses than those
sought by Senate Democrats, including substantial relief from the corporate
alternative minimum tax, a tax designed to ensure businesses do not take so
many breaks that they pay no taxes at all.
Republicans also sought to accelerate income tax cuts scheduled to take place in
2004 under the tax cut package enacted last year.
Democrats sought more generous benefits for the unemployed, including allowing
part-time workers to draw benefits. But talks between the House and Senate on a
compromise package broke down in a dispute over how best to help laid-off
workers pay for health insurance.
None of those controversial issues would be included in the economic stimulus
package proposed by Daschle.
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