- The Washington Times - Thursday, November 29, 2001

Senate Democrats yesterday agreed to cut in half their demand for $15 billion in new spending, but the White House insisted they would have to forgo the other half before President Bush signs an economic stimulus bill.
House and Senate leaders from both parties huddled last night in an effort to forge a deal that would satisfy the president's call for tax cuts and Democratic demands for new spending. Despite the parties being far apart on the details, senators expressed optimism that a deal could be reached, but probably not soon enough for Mr. Bush.
"Seven weeks ago, I asked Congress to send me an economic stimulus package," Mr. Bush said yesterday during a speech to the U.S. Farm Journal Corporation. "This country is waiting for action, and in the time that we've been waiting, more than 415,000 workers have lost their jobs.
"Further delay could put more Americans and more families at risk," he added. "So let's move. Let's get the job done."
A 45-minute meeting last night between congressional negotiators ended without reaching a deal, although lawmakers from both parties said a package should pass before year's end.
"This is an important breakthrough," said Senate Minority Leader Trent Lott, Mississippi Republican, before the meeting.
Senate Finance Committee Chairman Max Baucus, Montana Democrat added, "It's more than a kick-start. Things are starting to move."
House Speaker J. Dennis Hastert said after the meeting that the primary concern is how to structure the negotiations under the rules because the Senate hasn't yet passed a stimulus bill, while the House has.
"We didn't want to get into the policy side before we had a procedure worked out," the Illinois Republican said, adding that another session was planned for today.
Although the Republican-controlled House has already passed a stimulus bill, Senate Majority Leader Tom Daschle predicted Republicans will be blamed if the Democrat-controlled Senate does not pass a version before Congress recesses for the Christmas holiday next month.
"I don't know how you blame the Democrats when it was the Republicans who made a point of order against the bill in the first place," Mr. Daschle said at a news conference. "It's the Republicans who have refused to come to the table, in the second place.
"So it seems to me that if anybody is to blame it's our Republican colleagues," the South Dakota Democrat added. "We're trying to start over and try to find a way to break the impasse, even though the Republicans have thwarted our efforts so far."
During a breakfast meeting with Mr. Bush and other congressional leaders at the White House yesterday, Mr. Daschle made a proposal that he said might "lead to a breakthrough in the impasse that we've had in the last few days."
He offered to remove a proposal to spend $15 billion on "homeland security" from the economic stimulus package and make it an amendment to the defense appropriations bill.
But the White House pointed out that Mr. Bush had already approved $40 billion in spending after the September 11 attacks in order to stimulate the economy, securing an agreement from Democrats that no additional spending would be needed this year.
During yesterday's breakfast meeting, Mr. Bush warned Democrats "he would veto anything that violated an agreement they already made," said White House Press Secretary Ari Fleischer.
"An agreement is an agreement," Mr. Fleischer said. "After all, if the president says, 'We made an agreement; OK, we didn't mean it; let's come up with a new agreement,' what's to hold anybody accountable for the newest agreement? They'll just violate that one as well."
As for the Democrats attaching the new spending to the defense bill, Mr. Fleischer said additional spending would be vetoed, "regardless of the vehicle." He also was not impressed by the Democratic offer to cut the $15 billion spending proposal by half.
"It's movement in the right direction, but there is additional movement to be made," he said. "About another $7.5 billion more."
The White House was equally unenthusiastic about a proposal by Sen. Pete V. Domenici, New Mexico Republican, to temporarily suspend the payroll tax as a way to give Americans more take-home pay for holiday shopping. Asked if he supports the idea, Mr. Bush said: "I support the Senate coming together and getting a bill moving as quickly as possible."
Mr. Fleischer warned there was a downside to Mr. Domenici's proposal. "Any time you reduce payroll taxes, you're reducing the amount of money that goes into Social Security and into Medicare," he said. "Both programs are going broke."
He added: "The president believes it's an interesting idea but there are better approaches. And the better approach is the one the president has proposed."
While Mr. Bush signaled he is willing to give ground on Democratic demands for extending unemployment benefits, he insisted the bulk of the stimulus bill remain tax relief. In addition to accelerating rate reductions for individual taxpayers that were passed in May, the president wants new tax cuts for corporations.
"The plan should allow companies and entrepreneurs to deduct the cost of new investments more quickly, to encourage businesses to grow and to create job opportunities for Americans," the president said. "And the plan should reform the corporate income tax, to do away with the alternative minimum tax, a tax that pushes tax rates up at exactly the moment when corporate America's profits are going down."
The White House said that if its version of the stimulus package passes, the federal budget might not run into deficit, as was predicted yesterday by Mitch Daniels, director of the Office of Management and Budget.
"It is regrettably my conclusion that we are unlikely to return to balance in the federal accounts before possibly fiscal year 2005," Mr. Daniels said in a speech to the National Press Club.
Analysts expect the budget to fall into a deficit of at least $25 billion for the current fiscal year, which began October 1, as a result of the economic slowdown.
Mr. Daschle said the stimulus package should have a different emphasis.
"We think it's very important to address, first and foremost, the workers, the unemployment compensation and health benefits," he said. "Beyond that, we're hoping that the rebate is part of it, addressing tax relief to those payroll taxpayers who got no help before."
He also indicated he would budge on some corporate tax relief, although he added "that would supplant the rate decrease acceleration that the Republicans had proposed. It has to be one or the other."
Mr. Fleischer said the Democratic stimulus bill amounts to "spending in order to buy votes. Because that is what appears to be happening in the Senate right now, as opposed to a bill that focuses on stimulus for the economy to get the economy going and growing again."
Dave Boyer contributed to this report.

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