Bush pushing for fast relief

Economic aid bill's passage demanded

Senate fight looms

War On Terrorism

The Nation

November 01, 2001|By David L. Greene and Karen Hosler | David L. Greene and Karen Hosler,SUN NATIONAL STAFF

WASHINGTON - President Bush demanded yesterday that Congress quickly enact an economic stimulus package, saying he was deeply troubled by news that the economy failed to grow for the first time since 1993.

Bush said the new report - the clearest sign yet that the nation may be in the midst of a recession - "confirms that the events of September the 11th really shocked the nation."

"My call to Congress," the president said, "is, `Get to work and get something done.' The American people expect us to do just that. Congress needs to pass a stimulus package and get it to my desk before the end of November."

Swift action, though, appears unlikely in Congress, where positions seemed to be hardening yesterday in a partisan standoff over what benefits should be included in a package to revive the economy.

Senate Majority Leader Tom Daschle said he believed it was essential that any stimulus plan provide increased benefits to laid-off workers and subsidized health insurance premiums. Neither of his demands is included in a stimulus bill that the House has already passed.

"We will fight with all that we've got to ensure that unemployment compensation and health benefits are covered in any economic plan that the Congress passes this year," Daschle said. "We will not pass a bill that does not address those two critical needs."

Republicans, concerned that Democrats would call for too much new spending under their plan, argue that further tax relief should be the centerpiece of any plan.

The president spoke a few hours after the Commerce Department released figures showing that the nation's gross domestic product fell at a rate of 0.4 percent from July through September. Economists noted, though, that the economic decline in the third quarter was smaller than had been predicted.

Another tax cut

Last month, Bush proposed a $60 billion to $75 billion plan focused mostly on further tax relief. It would repeal the alternative minimum tax on corporations, let businesses write off investments more quickly, accelerate tax cuts scheduled to take effect later under Bush's earlier tax relief package and distribute $300 rebates to low-income workers who received none under the earlier tax cut.

Republicans in the Senate have proposed legislation that closely mirrors Bush's plan.

There is broad consensus among lawmakers for providing relief for low-income Americans and for faster write-offs, which are intended to encourage business investment. But beyond that, gaping differences remain over how best to trigger an economic rebound.

With conservative Republicans leading the charge, the House last week narrowly passed a $100 billion stimulus bill that calls for greater tax relief than Bush proposed. In addition to the president's ideas, the House measure would give billions of dollars in rebates to corporations - refunding taxes they paid going back to 1986 - and would slightly reduce the tax on capital gains.

In the Senate, which has yet to vote on any plan, Democrats are pushing a bill that would concentrate much more on new spending. It would include up to $20 billion in new infrastructure improvements, such as better security on roads and bridges, at power plants and at other public facilities.

More than a means to rescue the economy, Daschle argued, the proposal should be considered in "emergency terms."

"I'm not even enamored any longer with this word `stimulus,'" the Senate majority leader said. "I think we've got a lot of recovery work to do."

Bush warned against too much further spending, though he stopped short of threatening to veto a bill he feels includes too much.

"The temptation is to fund everybody's good idea," the president said yesterday, speaking to the National Association of Manufacturers. "And my attitude is that our money ought to be focused and effective. The spending ought to be focused."

Compromise is key

Meeting the president's goal of enacting the legislation by the end of November is possible, but the timetable is very tight. Some lawmakers have expressed concern that compromises could end up giving both sides what they want, thus driving up the cost.

"There's going to be trade-offs," Rep. Lindsey Graham, a South Carolina Republican, said yesterday. "But at end of the day, we can't go crazy here and deplete the treasury totally."

The Senate Finance Committee is scheduled to take up the Democratic stimulus proposal Tuesday. To win Senate approval for his package, Daschle will probably need 60 votes in the near evenly divided Senate. Thus, some compromise would have to be struck to win over at least some Republican swing votes.

Once the Senate passes a bill, differences with the House-passed measure would have to be reconciled in negotiations that would likely involve the White House as well.

Despite lawmakers and Bush expressing optimism about finding common ground, there were few evident signs of any deals yet.

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