Stalemate dims hopes on stimulus

Competing versions likely doomed in Senate, Daschle says

Bush voices frustration

But some doubt need, citing deficits, improving economy

February 06, 2002|By Karen Hosler | Karen Hosler,SUN NATIONAL STAFF

WASHINGTON - Locked in a partisan stalemate, the Senate appears ready to abandon an economic stimulus package that some say might no longer be needed as the economy shows signs of recovering on its own.

Senate Majority Leader Tom Daschle said yesterday that he would shelve a Democratic version of the measure because he lacks the 60 votes needed to surmount Republican procedural obstacles and pass the bill. The Senate is scheduled to hold a vote today that will probably doom the legislation in any form, Daschle said.

"I've made every effort I can think of to find the common ground," the Democratic Senate leader said of the package, a combination of tax cuts and benefits for the jobless.

Daschle said later in a statement: "Republicans have spent over two weeks blocking a targeted, time-limited, bipartisan economic recovery bill.

"As cover for their continuing obstructionism, they offer their $214 billion package of tax cuts - the majority of which won't take effect until next year and beyond - and they're calling it a compromise."

An economic stimulus package became a priority for both parties last fall after the terrorist attacks appeared to tip a sluggish economy into recession. But Republicans and Democrats disagreed on how to structure the package.

Republicans sought to speed up last year's tax cuts for individuals and to approve new breaks for businesses. Democrats favor benefits for low-income and jobless workers. Neither version commands the 60 votes needed to defeat the other party's delaying tactics, which amount to a filibuster, and pass the Senate.

Republicans complained that Daschle was also blocking a vote on a centrist proposal, backed by President Bush and a handful of Democrats, that is probably the most popular of several competing alternatives. They have portrayed Daschle as chiefly to blame for the Senate deadlock.

"I really don't think [the Democrats] want a stimulus bill," said Sen. Don Nickles of Oklahoma, the Republican whip. "My guess is that [Daschle] was catching flak for not getting something done in December. So he figured, `I'll try this for a day or two; if it doesn't work, I'll pull it down.'"

Upon returning to the White House from a trip to Pittsburgh, the president expressed frustration and declared that the economy still needed the benefit of further tax cuts.

"I'm very disappointed," Bush said of Daschle's decision to shelve the measure. "There's a lot of workers who hurt, and they need help. Our economy, while there's some good news, needs more stimulus."

Both sides were eager to avoid blame for landing the death blow on the legislation. But neither expressed any sense of political imperative that a legislative stimulus is necessary now that the outlook for the economy is brightening.

"Clearly, there is a feeling that it is not as compelling as it may have been," Daschle said. "We've at least temporarily, and maybe more permanently, pulled out of the recession, at least in the last quarter. We've got two-tenths of a percent of growth at this point."

Sen. Charles E. Grassley of Iowa, the senior Republican on the Senate Finance Committee and a leading advocate of economic stimulus legislation, said: "I've always said the longer we wait to enact stimulus legislation, the less effect it's going to have."

Deficits prompt caution

With the federal budget facing deficits, some conservative Republicans say it might be wiser not to spend the money on a stimulus package that involves additional long-term spending proposals.

"If we can't pass a solid economic stimulus bill, we should balance the budget this year," said Rep. Pat Toomey, a Pennsylvania Republican.

Prospects for the legislation have been dimming for weeks. But Bush included $89 billion for an economic stimulus plan in the budget proposal he sent to Congress this week, and he renewed calls for Senate action. A $100 billion stimulus bill passed the House last year.

"We got a good bill out of the House," the president said. "And I believe that we had a good chance to get a good bill out of the Senate last fall.

"We've been working with both Republicans and Democrats to try to forge a good package, and, you know, I'm just sorry it had to happen."

Action still possible

Still, with congressional elections to be held this fall and the two parties fighting for control of the closely divided House and Senate, action later this year on elements of the legislation deemed to have widespread appeal cannot be ruled out.

Daschle said Democrats would continue to push for an extension of jobless benefits, which, he noted, have been approved by Congress during each of the past several recessions. But Republicans say they would resist legislation that includes jobless benefits without further tax breaks to promote economic growth.

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