- The Washington Times - Friday, December 14, 2001

ASSOCIATED PRESS

Congressional negotiators on an economic-stimulus package tentatively agreed yesterday to key parts of an unemployment assistance plan and began tackling the more difficult issue of helping laid-off people afford health coverage.

Tax cuts were left until later.

The bipartisan House-Senate group said the package probably would extend the 26-week unemployment benefit by an additional 13 weeks for workers who lost their jobs after March 15, when economists determined the nation's recession began. President Bush made an identical proposal this week.

Participants said they were also near agreement on a proposal to use optional grants to states to help them provide jobless benefits to part-time workers who weren't otherwise covered.

"With a little tweaking, we could accept that," said Sen. Charles E. Grassley of Iowa, ranking Republican on the Senate Finance Committee and the Senate Republicans' negotiator.

Later in the day, the talks turned to health care coverage, which was critical in determining the size and scope of personal and business tax cuts sought by Republicans.

"It depends on how it fits together," said Sen. Max Baucus, Montana Democrat and chairman of the Finance Committee. If Democrats secure a sizable amount of health care coverage in the package, he said, "it's possible we could go further" on tax cuts.

Democrats want a one-year, 75 percent federal subsidy for the COBRA insurance policies available to laid-off workers and more money for Medicaid so that states can extend coverage to those not eligible for COBRA. Mr. Bush and congressional Republicans favor a 50 percent tax credit for many types of health insurance policies and grants to states that could be used to provide coverage.

The talks were continuing into the evening and could extend to the weekend. House Majority Leader Dick Armey, Texas Republican, said House leaders hoped a compromise would be ready for a floor vote as early as Tuesday.

The talks could collapse, however.

House Republican leaders, who pushed through a $100 billion package heavy on tax cuts in October, were considering if the negotiations failed bringing up a second measure on their own that would include more jobless aid. Although that package might be blocked in the Senate, it would give House members a politically important vote on increased assistance to the unemployed and allow them to blame Democrats for the failure.

Still, chances for an overall compromise brightened considerably when Senate Majority Leader Tom Daschle, South Dakota Democrat, confirmed that he "is willing to try" to persuade a reluctant 50-member Democratic Senate caucus to accept a Republican bottom line: accelerating one of the income-tax cuts now scheduled to take effect in 2004 or 2006.

The Democrats are offering acceleration of the 27 percent rate to 26 percent in 2002; Republicans and Mr. Bush want the 27 percent rate cut to 25 percent next year.

"We can't go nearly as far as the Republicans would like, but we're willing to at least make an effort," Mr. Daschle told reporters.

Another sticking point on the tax front is whether to abolish the corporate alternative minimum tax or provide less-sweeping relief. Amid Democratic opposition, Mr. Bush essentially has given up on repealing the tax, but House Republicans say it is important so that companies can take full advantage of other business tax cuts.

Both sides said a final compromise probably would include a new round of rebate checks of up to $300 for workers who did not receive one earlier this year or didn't get the full amount.


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