- The Washington Times - Wednesday, December 12, 2001

President Bush yesterday offered Senate Democrats a deal on his proposed economic stimulus package, proposing a series of compromises on issues that have kept the bill bottled up since the House approved the measure 49 days ago.
The president's offer involves smaller tax cuts and more aid to the unemployed. Senate Democrats, who have blocked the $210 billion stimulus package passed by the House Oct. 24, also made some concessions in negotiations yesterday but continued to oppose tax cuts for individual taxpayers.
Mr. Bush sent Treasury Secretary Paul O'Neill to Capitol Hill yesterday to meet with a bipartisan group of senators and deliver the proposed compromise.
"The secretary has gone up there with a new proposal that the president believes will stimulate the economy, help unemployed workers and help the Senate help itself," White House spokesman Ari Fleischer said yesterday. "The president is trying to break the impasse because the Senate leaders have been unable to do so."
Later, Mr. O'Neill and Mr. Bush met at the White House with centrist senators, including Sen. John B. Breaux, Louisiana Democrat, and Sen. Olympia J. Snowe, Maine Republican.
"I think we're narrowing down the points of disagreement," Senate Minority Leader Trent Lott, Mississippi Republican, said of the negotiations.
The new round of negotiations came two days after Vice President Richard B. Cheney called Senate Majority Leader Tom Daschle an "obstructionist" because of the way the South Dakota Democrat has prevented passage of the economic stimulus plan.
The White House plan would extend unemployment benefits and increase health care assistance for the unemployed. House Republicans last week offered a $20 billion plan similar to the administration's new proposal.
Under the plan:
The corporate alternative minimum tax would now be scaled back rather than repealed outright.
The acceleration of individual income tax-rate cuts would now be focused entirely on the 25-percent bracket.
The 13-week extension of unemployment benefits would now be nationwide, rather than limited to those states hardest hit by the economic downturn.
There would be some additional money for health insurance for laid-off workers, beyond that contained in the National Emergency Grants.
"The president has listened to the Democrats. He hopes the Democrats will now be willing to listen to him," Mr. Fleischer said.
Meanwhile yesterday, the Bush administration asked Congress to raise the national debt ceiling to $6.7 trillion. In a letter to Mr. Daschle, Mr. O'Neill said the federal government will exceed its current borrowing limit of $5.95 trillion by February.
In August, the administration had estimated the debt limit would not be reached until September 2003. In his letter to the Senate Majority Leader, Mr. O'Neill said the effects of "the tragic terrorist attacks" on September 11 were responsible for the increase in government borrowing.
Democratic opposition to tax cuts remains the primary obstacle to Senate passage of the stimulus plan.
Yesterday, the president said he would accept a compromise that reduces the 27 percent income tax rate to 25 percent in 2002, four years earlier than under the 10-year, $1.35 trillion tax cut enacted earlier this year.
Mr. Bush had originally sought to accelerate all the income tax cuts, but Democrats criticized that as favoring the wealthy.
Mr. Daschle said Democrats would accept many of the business tax cuts proposed by Republicans but opposed the accelerated individual tax cuts.
This article is based in part on wire service reports.

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