President's input urged on plan to lift economy

Senate Democrats push for public works spending, aid for laid-off workers

War On Terrorism : The Nation

November 07, 2001|By Karen Hosler | Karen Hosler,SUN NATIONAL STAFF

WASHINGTON - Senate Democratic leaders began yesterday to advance an economic stimulus plan that relies heavily on public works spending and aid for laid-off workers. But with Republicans resolutely opposed to that plan, both sides urged President Bush to try to end the stalemate.

Their efforts came on a day when the Federal Reserve was cutting short-term interest rates for the 10th time this year, in a so-far-unsuccessful effort to revive an economy widely believed to be in a recession.

Senators of both parties warned that they held little hope of agreeing on a legislative remedy without Bush's intercession.

"The president needs to be involved - the sooner, the better," said Senate Majority Leader Tom Daschle, a South Dakota Democrat.

Daschle and Sen. Max Baucus, the Montana Democrat who is chairman of the Senate Finance Committee, said they want Bush to begin immediate negotiations involving senators of both parties and House members. The Republican-led House has already passed an economic stimulus proposal made up entirely of tax relief, much of it for corporations.

The president has offered his own stimulus plan, similar to the $100 billion measure approved by the House and opposed by most Democrats. But Senate Democratic leaders, recognizing that they will have to come to terms with the White House to enact any measure, say they would prefer to negotiate now rather than let the process drag on.

"He has to step in if we are going to get through all this more efficiently, more quickly and more on a bipartisan basis," Baucus said.

$88 billion package

The Finance Committee is scheduled to vote tomorrow on the first of two pieces of an $88 billion Democratic stimulus package. Yet Baucus predicted that Senate action would be "unproductive until the president steps in."

Sen. Charles E. Grassley of Iowa, the senior Republican on the Finance Committee, issued the same appeal to Bush, warning that time is running out for Congress to have much effect on the ailing economy.

"The president ought to expend a little political capital now to get some good economic capital later," Grassley said.

So far, the White House has been cool to such appeals. Bush has promised to become actively involved in the talks between the House and Senate after the Senate approves its version of a stimulus measure, but not before.

"The real negotiating will be done, as always, in the conference as the House and the Senate meet," Bush's spokesman, Ari Fleischer, said in explaining the president's approach. "The administration will be there."

Unless the president intervenes, Baucus expects to move the first piece of the Democratic package - estimated to cost $68 billion - through the Finance Committee on a party-line vote of 11 to 10. Sen. James M. Jeffords, a Vermont independent, is likely to vote with the committee's 10 Democrats.

That part of the package includes $37 billion in tax cuts for individuals and businesses, and a $31 billion relief package composed mostly of unemployment benefits and health insurance coverage for laid-off workers.

A second, $20 billion piece of the Democratic package is being developed by Sen. Robert C. Byrd of West Virginia, the chairman of the Appropriations Committee. It calls for public works spending to tighten national security at rail and mass transit facilities, on public utilities, at the nation's borders and along highways.

Bush has said he would support $60 billion to $75 billion in tax cuts, some of which parallel what the Senate Democrats have offered. But the president has also said he would reject any new spending beyond the $55 billion that Congress has already approved in emergency relief for victims of the Sept. 11 terrorists attacks and for a bailout of the airline industry.

Threat of veto

Bush bluntly warned House and Senate Appropriations Committee members at a White House meeting yesterday that he would veto any additional spending measures that wind up on his desk.

Senate Republicans have offered their own $89 billion stimulus package of tax cuts, roughly paralleling what Bush has proposed. But at this point, neither the Democratic nor the Republican proposal is thought to have enough support to garner the 60 votes needed to overcome a filibuster and win Senate approval.

House Speaker Dennis Hastert chided senators yesterday for moving too slowly to try to lift the economy out of its doldrums.

"Since Sept. 11, more than half a million jobs have been lost, and consumer spending has hit a 15-year low," Hastert said. "I believe it's fairly obvious that more than just rate cuts are needed on our nation's economic front."

"American workers," he added, "need the Senate to act soon so President Bush can sign an economic growth package into law by Thanksgiving in order to help prevent future job losses, get others back to work, and restore confidence in both our consumers and our businesses."

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