- The Washington Times - Friday, January 4, 2002

CRAWFORD, Texas President Bush and Senate Majority Leader Tom Daschle will start the 2002 political battle over the economy in the next two days, each man offering and defending his party's economic-recovery proposal.

Mr. Daschle will make his case to the American people in a speech in Washington today, pre-empting by one day a West Coast trip by Mr. Bush geared toward putting pressure on Senate Democrats who, at the end of the last congressional session, blocked a bipartisan bill to help the economy.

In his speech, Mr. Daschle will outline a Democratic economic-recovery plan that Republicans fear could include a partial rollback of the Bush administration's tax cuts.

"The most important thing we should do is restore long-term fiscal integrity to our budget so we can bring down long-term interest rates," Mr. Daschle said in prepared remarks, excerpts of which were obtained by The Washington Times yesterday. "In a real sense, low interest rates are the best possible tax cut."

Mr. Daschle said repeatedly last year that Senate Democrats would not try to repeal any of the administration's $1.35 trillion tax cuts, for which 12 Senate Democrats voted. Since then, the recession and other factors have led to projections that the federal government will run into deficits for at least the next three years.

"A year ago, we had the resources and the flexibility to make virtually any urgent investment we needed," the South Dakota Democrat says in his prepared text, which he will deliver at the Center for National Policy.

"We do not have the flexibility and those resources today because Republicans chose ideology over experience," he says. "By returning to fiscal discipline and putting partisanship, politics and ideology aside for the good of our nation, we can craft a plan that leads us back to fiscal integrity and that promotes economic growth and opportunity for all Americans."

A spokesman for Senate Minority Leader Trent Lott of Mississippi said the Republicans expect the Democrats will propose a tax increase.

"We know it's there, we know it's hidden, we know it's inevitable from a Democratic-controlled Senate," said Lott spokesman Ronald Bonjean. "America has seen the Democratic spending spree, and we are now looking for the tax increase."

Senate Democrats killed Mr. Bush's economic-recovery proposal by refusing to allow it to come to a vote before Congress adjourned Dec. 20, saying the administration failed to provide adequate health benefits and other support for laid-off workers.

Vice President Richard B. Cheney subsequently branded Mr. Daschle an "obstructionist" for blocking the proposal.

"The president is going to continue to urge the Democrats in the Senate to act, and the American people can help by letting Congress know that they are hurting and worried about our economic situation," said Deputy White House Press Secretary Scott McClellan.

"The president is going to continue to talk to the American people directly about his economic-growth and job-creation proposals."

On tomorrow's trip, the president will hold a town hall meeting in Ontario, Calif., and later travel to Portland, Ore., to visit an employment center before addressing workers and business leaders.

At the meeting, Mr. Bush will stress two key tenets of his 2002 domestic agenda. "The two E's the economy and education will be where he begins the new year," Mr. McClellan said. He said the president does not plan to offer a new proposal, but will continue to work with lawmakers on the package.

In his speech today, Mr. Daschle will outline a seven-point plan that he says will create jobs and boost the economy. Mr. Daschle will propose a tax credit for companies that create new jobs and a one-year depreciation bonus for businesses, 40 percent for the first six months and 20 percent for the second six months.

He also wants to "substantially" increase spending on security, boost spending for the education plan that Congress just approved, and make permanent certain tax credits for research and development. In the text, he calls for "swift passage" of "fast-track" trade-promotion authority for Mr. Bush, but wants to make it "in concert with expanded trade-adjustment assistance."

His outline includes a "balanced" energy plan that would increase oil production with conservation and "alternative-energy development." The House has approved a plan to allow oil drilling in the Arctic National Wildlife Refuge in Alaska. Senate Democrats have vowed to block that proposal.

•Dave Boyer contributed to this report from Washington.

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