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Archive for Thursday, January 24, 2002

Dwindling federal surplus boosts drive for stimulus

January 24, 2002

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— Republicans and Democrats agreed to resurrect economic stimulus legislation Wednesday as they returned for an election-year session of Congress, their efforts given urgency by evidence of rapidly eroding budget surpluses.

"This is an opportunity to put together the pieces that ought to have 60 votes at the end of the day," said Senate Majority Leader Tom Daschle, D-S.D., who blocked passage of a House-passed bill in December.

Republicans said Daschle was merely trying to shed the obstructionist label they had pinned on him. "He's in the business of getting himself off the hook," said Sen. Larry Craig, R-Idaho.

Even before the opening gavels fell at noon in the House and Senate, sour economic news intruded.

The nonpartisan Congressional Budget Office lowered its projected budget surpluses for the next decade by 71 percent from last year's estimates a reduction of $4 trillion and said the country would run a deficit for each of the next two years. The agency put the 10-year surplus at $1.6 trillion, down from $5.6 trillion in last year's forecast.

For the current fiscal year, a deficit of $21 billion was estimated, dropping to $14 billion for the 2003 fiscal year heralding an end to a short, happy era of surpluses.

The more pessimistic outlook will complicate any attempts to create large new government programs, and Democrats trumpeted the report as fresh evidence that the tax cuts President Bush won from Congress last year were irresponsible.

"The president told us and told the American people that we could have it all," said Sen. Kent Conrad, D-N.D, chairman of the Senate Budget Committee. "He was wrong by a country mile."

The committee's top Republican, Sen. Pete Domenici, R-N.M., said the bleaker budget picture was mostly due to the recession as well as efforts to strengthen the economy and battle terrorists.

Bush greeted congressional leaders at the White House and was quoted as making a pledge to Democrats not to use the war on terrorism for election-year gain. "I have no ambition whatsoever to use this as a political issue," he said, according to sources who declined to be identified.

In the White House Cabinet Room, Bush and senior congressional leaders listed their legislative priorities for the year ahead: expanded trade authority for the president, a farm bill, a patients' bill of rights, energy legislation and an economic stimulus package to help victims of the recession and boost the sluggish economy.

Daschle and the Republicans spent the day haggling over the terms for debate on economic stimulus legislation. Long after nightfall, they agreed to begin today under rules likely to require a 60-vote majority for any individual component, as well as for the final bill.

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