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Archive for Wednesday, February 6, 2002

s proposal

February 6, 2002

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— Senate leaders conceded Tuesday that they won't reach an agreement on legislation to bolster the economy and plan to shelve it today, signaling the tough battle ahead about the president's just-released budget and economic plans.

President Bush made a plea for economic stimulus legislation in his State of the Union address, and he included it in the 2003 budget unveiled on Monday, arguing that the measure provided insurance for a still-weak economy. But, with showdown votes planned for today, Democrats and Republicans said they had no hope of bridging the political divide about the best mix of tax cuts and aid to the unemployed  though a deal may be reached simply to extend unemployment benefits by 13 weeks.

As lawmakers digested the details of Bush's $2.13 trillion budget plan and heard testimony from senior administration officials on Capitol Hill, other parts of the budget plan fared better. Many Democrats quickly supported the president's call for the biggest boost in military spending in two decades, and the administration won praise for its push to bolster homeland security. The president had a campaign-style event in Pittsburgh to promote his plans to fight bioterrorism.

But Democrats pounced on the administration's projection of deficits for the rest of Bush's term, with Senate Budget Committee Chairman Kent Conrad, D-N.D., declaring that history will judge the president "harshly" for "taking us back down the road to deficits and debt."

Still, the collapse of the stimulus plan would help improve the administration's 2003 budget forecast, turning a projected $80 billion deficit into a $15 billion deficit  and actually producing a surplus in 2004. Moreover, if the economy revives in time for the November elections, GOP strategists said, the administration wouldn't have to share credit with Democrats but instead could claim last year's tax-cut was responsible.

Conservative Republicans pressing for a balanced budget said that absent the stimulus deal, a balanced budget was in reach and they would press for one by calling for deeper spending cuts. House Majority Leader Dick Armey, R-Tex., meanwhile, broke sharply with the president over his plan to greatly expand the Clinton-era AmeriCorps, saying "the idea that government can teach charity to America rings very hollow with me."

Bush, arriving in Washington after his trip to Pittsburgh, told reporters he was "very disappointed" by the apparent demise of the stimulus bill. "I was just informed the Senate will not vote out a stimulus package," he said. "There's a lot of workers who hurt, and they need help. Our economy, while there's some good news, needs more stimulus."

But the push for the stimulus package faded in part because much of the economic data has been positive since Congress recessed in stalemate last December, lawmakers said. Federal Reserve Chairman Alan Greenspan last month told Congress he wasn't convinced the legislation was necessary anymore, further dimming the bill's prospects.

"I don't think there's any question they don't want a stimulus package unless it's their stimulus package," Senate Majority Leader Tom Daschle, D-S.D., charged Tuesday. "There is very little interest in working with us or negotiating some compromise." He added that "it is fair to say that there is a growing number of economists that question the stimulus."

In response, Senate Minority Leader Trent Lott, R-Miss., accused Daschle of starting the session on a "partisan note" and "hiding behind procedure" to scuttle the stimulus legislation.

"The Daschle Democrats, in a cynical effort to score political points against this president, have chosen to fire a direct shot into a limping economy by killing the economic stimulus package," Lott said in a statement after Daschle's remarks.

Sources said that it appeared likely a consensus could be reached to strip the bill down to the 13-week extension of unemployment benefits. Democrats and moderate Republicans have pressed to pass the extension; benefits are now limited to 26 weeks, and many workers are losing benefits. Sources close to the GOP leadership said they were considering accepting the extension, as long as the Democrats didn't add any other provisions.

The unemployment extension would face an uncertain future in the House, where the leadership has assured members it would not accept new spending without tax cuts to boost the economy.

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