Lott on Larry king show last night said there would be a stimulus deal today.
Daschle Offers Deal on Stimulus Bill,
WASHINGTON -- Trying to push talks on the
economic-stimulus package to the finish line, Senate
Majority Leader Tom Daschle signaled he would try
to sell to Democrats an immediate cut in individual
tax rates if Republicans agree to meet Democratic
demands for unemployment aid.
The offer, which would accelerate a planned
one-percentage-point cut in the 27% individual
income-tax rate, was floated during a breakfast
meeting at the White House. In return for the rate
cut, Mr. Daschle wants Republicans to expand
unemployment benefits, especially to cover
temporary and part-time workers, and to commit
more funds to help jobless workers buy health coverage.
In the morning meeting, President Bush pushed congressional leaders to find common ground on the bill
intended to boost the ailing economy. House Speaker Dennis Hastert of Illinois called the session a
"frank exchange of views." Nicholas Calio, Mr. Bush's liaison to Congress, was asked to leave the
breakfast at one point, so the president and four lawmakers could talk more frankly about the stimulus
package.
"I think we can get this thing done if we can just get people to the table," Mr. Hastert said late
Wednesday. The House already passed a stimulus package, but the effort stalled in the Senate because
Democrats want more money for people who lost their jobs, while Republicans prefer more business
and individual tax cuts.
Keeping up the pressure, Treasury Secretary Paul O'Neill came to the Capitol late in the day to meet
with Mr. Daschle. Mr. O'Neill said the session was a chance to discuss "sticking points" in a new White
House stimulus package, offered Tuesday.
If a deal doesn't materialize, GOP House leaders said they may seek a vote on the White House
package before Christmas. The new House bill is almost certain to die in the Senate, but it would allow
House Republicans to cast votes on scaled-back business-tax breaks and meatier unemployment
benefits, and to blame Senate Democrats for the package's demise. Some Republicans also are seeking
the new vote to provide themselves with election-year cover.
Prospects for a deal looked somewhat brighter last night, when House and Senate tax writers holed up
in an office to begin hashing out provisions -- the first substantive meeting of the team in weeks.
However, Senate Finance Chairman Max Baucus of Montana said he may pursue his own Plan B by
conducting talks with ranking-Republican Charles Grassley of Iowa on a compromise that could pass
the Senate by a large margin.
The one-percentage-point reduction in the 27% income tax rate would be one issue on the table, Mr.
Baucus said. "We want a stimulus that we all, or most of us, can vote on," the Montana Democrat said,
referring to the full Senate.
In a memo, the administration disclosed the tax
provisions it is seeking, as part of a package
offered this week to Senate moderates. The
administration has avoided putting a price tag
on specific provisions, although some
lawmakers estimated the whole package could
come to $100 billion next year.
The administration's list would authorize $300
checks to low-income workers, and would cut
the 27% tax rate to 25% in 2002, rather than
2006, as currently scheduled under the Bush
tax plan passed by Congress earlier this year.
The Daschle proposal, on the other hand,
would cut the rate to 26%, as now scheduled
in 2004.
On the business side, the administration
proposed a 30% depreciation write-off for
new business investment; new deductions for
small firms; bigger loss deductions for
businesses; and some form of corporate
alternative-minimum-tax relief. The
administration once demanded outright repeal
of AMT, which requires companies that take
sizable deductions to pay some taxes, but says its position is now fluid.
Of those provisions, the low-income checks, rate cuts and depreciation
changes are regarded as the best stimulus prospects. But even they
have drawbacks. An increase in depreciation is largely untested and
might fall flat in an economy where many businesses have
over-invested. The stimulus checks would take weeks to prepare and
mail out. Rate cuts also would take effect slowly.
For couples filing jointly, the 25% bracket would affect taxable income
between $46,700 and $112,850 in 2002. For singles, it would affect
taxable income between $27,950 and $67,700. People making
$75,000 to $150,000 would get an average $425 next year from the
break, according to calculations by Citizens for Tax Justice, a
moderate-to-liberal foundation-funded advocacy group.
Most Democrats fiercely opposed to the accelerated rate cuts regard them as expensive and likely to
bring big deficits. Estimates released Wednesday by the Democratic staff of Congress's Joint Economic
Committee show the $300 checks would provide 13 times the increase in gross domestic product in
the first year, than would accelerating to 2002 all of Mr. Bush's individual rate cuts scheduled for 2006.
Estimates also show that dropping the 27% rate to 25% in 2002, as Mr. Bush is proposing, would cost
$82 billion through 2011.
Administration officials insisted again Wednesday that reforms of the corporate AMT would help the
economy by encouraging more spending. Critics say businesses more likely would add the tax savings
to their bottom lines.
-- David Rogers contributed to this article.
Write to Shailagh Murray at shailagh.murray@wsj.com and John D. McKinnon at
john.mckinnon@wsj.com |
