- The Washington Times - Monday, November 5, 2001

Two all-out wars are being waged by the Bush administration. One is against the evil terrorists in Afghanistan and the other is to save the U.S. economy from slipping deeper into a recession. Make no mistake about it: America's national security is at stake.

On one side of the economic war, President Bush and his allies in the Senate are fighting to pass a tax-cutting stimulus plan to help the economy recover quickly from the devastating blows from the September 11 terrorist attacks.

On the other side, Senate Democratic Leader Tom Daschle and most of his party have blocked or stalled any action to rescue an economy that has been hit by massive job layoffs, plant closings, falling corporate profits and the lowest consumer confidence levels in nearly two decades.

Mr. Daschle has said an economic recovery bill, which the House passed last month, is "not a priority." This is "not a front-burner issue," he added. And if there is a bill, Mr. Daschle and his Democratic colleagues remain fiercely opposed to the accelerated tax cuts that business leaders nationwide say are needed to get the economy growing again.

Meantime, unemployment continues to rise, with forecasts of the mounting jobless rate hitting more than 6 percent in the upcoming months.

Last week, the government reported what everyone had expected that the economy is shrinking for the first time in nearly a decade. The nation's gross domestic product, the measure of the goods and services we produce, declined at a 0.4-percent annual rate in the third quarter (July-September), after an anemic second quarter when the economy was barely breathing.

Forecasters say that the economy will not only shrink further in the fourth quarter, but that the contraction will be substantially bigger.

This means the administration will enter the 2002 midterm election year with the economy in a full recession, which may be just what Mr. Daschle and company want, say Senate Republican leaders.

With the weakening economy, and Tom Daschle showing no signs of any quick consideration of the president's stimulus plan, the long-simmering political war of words intensified last week. For the first time, Senate Republican leaders accused Mr. Daschle of deliberately blocking any legislative action because a weaker economy in 2002 means the Democrats would likely stand a better chance of gaining seats in Congress.

"What's clear now is that the Democrats are dragging their feet on an economic recovery plan. They want to see Republicans suffer the blame of voters next November," a senior Senate Republican leadership official told me.

Speaking with the full approval of Senate Republican leaders, this official accused Mr. Daschle of "playing politics with the economy," hoping to benefit at the polls from a longer recession.

The White House was stepping up its political offensive, too, though it avoided partisan attacks that might undermine a compromise stimulus plan that the president's lobbyists and key Democratic allies, like Louisiana Sen. John Breaux, were working on behind the scenes.

But senior White House advisers warned that unless a tax cut stimulus bill is passed soon, the economy is heading for much rougher waters.

White House economic adviser Larry Lindsey didn't mince words: "Passage of a stimulus bill along the lines of what the president proposed is built into the stock market's [expectations of an economic recovery next year]. If such a bill is not passed, the market would react badly, and it would hurt the economy, too," he told me.

Yet, while the economy burns, Mr. Daschle fiddles. As the Senate majority leader, he controls the business on the Senate floor. In this case, the shape of the stimulus bill that remains in limbo in the Finance Committee because tax-cutting Democrats like Mr. Breaux won't vote for it.

The reason is the Democratic plan is essentially a big spending bill, heavy with extended and enlarged unemployment benefits, health insurance payments and more job training funds, but not with the speeded-up tax cuts at the core of Mr. Bush's proposal.

Actually, only 10 percent of the unemployed have used up their benefits. But when Sen. Charles Grassley of Iowa, the Finance Committee's ranking Republican who drafted the GOP's plan, offered to extend benefits for these workers, Democrats turned him down.

A spokesman for Mr. Daschle told me the majority leader "shares the president's goals of passing a bill by the end of the month." But the legislative process is filled with built-in procedural delays, and Mr. Daschle and company intend to take full advantage of them.

The Democrats' stall-and-delay strategy is based on their politically self-absorbed belief that the longer the recession lasts, the better their chances of regaining control of Congress.

And Mr. Bush remembers what happened when a recession struck in the middle of his father's term as president in 1990. The Democrats picked up eight seats in the House, one Senate seat and two major governorships.


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