- The Washington Times - Friday, January 24, 2003

CLEVELAND, Jan. 24 (UPI) — Senate Minority Leader Tom Daschle, D-S.D., offered a Democratic alternative stimulus plan Friday that provides for less extended tax cuts than the Bush administration's plan, and more immediate aid to the cash-strapped states and to the unemployed.

The Democrats' plan would give a $300 tax cut immediately to every adult in a working family and in total would cost an estimated $140 billion. The plan would expire after one year.

President George W. Bush's $647 billion plan calls for accelerating the upper- and middle-income tax cuts voted in 2001 and scheduled for mid-decade, along with a new plan to cut stock dividend taxes. Also, the administration plan would create unemployment accounts of $3,000 for training and other expenses incurred by those out of work.

The administration's plan — which is in part of a revision of Bush's earlier 2001 plan — would be implemented over a 10-year span.

Under Daschle's plan, there would be an immediate tax cut "for all working Americans." The minority leader said that every adult in a working family would get a one-time tax cut of $300, including "stay-at-home moms and dads, single people who work, and retirees."

"Parents in working families would also get an extra $300 tax cut per child, up to two children. A typical family of four would save $1,200 on their taxes," said Daschle in an early afternoon speech to the City Club of Cleveland.

The Senate Democratic leader pitched his plan as one that would prime the pump of consumer spending more immediately than the Bush plan.

"Our broad-based tax cut alone would pump twice as much money into the economy this year as the entire Bush plan. That's the common sense way to get the economy going," Daschle said.

"Broad-based tax cuts will provide businesses with what they need most: customers. That is the most important thing we can do for businesses now in an economy driven by consumer spending."

Like to the Bush plan, Daschle's plan would provide tax relief to small businesses by allowing them to write off up $75,000 worth of investments immediately.

The Daschle plan would also provides $40 billion in fiscal relief for states and local governments, including $5 billion that would be set aside specifically to help states and communities address their most urgent homeland security needs.

Both plans come amid a U.S. economy that continues at a slow pace, dogged by mixed economic reports, a stalled stock market, and a recently finished holiday shopping season that was at best mediocre. At the top of nation's economic ills is the sustained level of 6 percent unemployment, with around 8 million Americans currently out of work and unable to find jobs.

"The statistics tell the same story. In the last two years, America has lost 2.3 million private sector jobs. Business investment has fallen to its lowest point in 50 years. And the national debt, which we actually begun paying down, is once again growing," said Daschle. "All over America, people who have done all the right things — who've worked hard, and saved, and thought they'd planned for the future — are worried that they could lose their job."

White House press secretary Ari Fleischer criticized the Daschle plan as one of a number of Democratic alternatives.

"There are many Democrat plans on taxes," Fleischer said. "There is no unified Democrat position. There is, I think, a growing movement on the Hill in support of what the president has proposed, and that will be tested over time."

"As the bill is taken up in the Ways and Means Committee, there are likely to be amendments to it. But the president is confident the core of it will move forward rather nicely," the White House spokesman added.

Under the Bush administration's proposal, income tax reductions in excess of the 15 percent tax bracket scheduled for 2004 and 2006 would be moved forward to the current year, resulting in new marginal tax rates of 25 percent, 28 percent, 33 percent and 35 percent — down from 27 percent, 30 percent, 35 percent and 38.6 percent.

The administration economic package call for increasing the amount of the child tax credit from $600 to $1,000 in 2003, accelerating a scheduled phase-in over the period between 2005 and 2010. In 2003, the increased amount of the child tax credit will be paid in advance beginning in July 2003 on the basis of information on the taxpayer's 2002 tax return filed in 2003.

Also, the Bush plan would create "Personal Re-employment Accounts" that would provide unemployed workers with up to $3,000 to use for job training, child care, transportation, moving costs, or other expenses associated with finding a new job.


(Reported by T.K. Maloy, UPI Deputy Business Editor, in Washington)

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