- The Washington Times - Saturday, January 4, 2003

Democratic leaders say they will strenuously oppose the centerpiece of the Bush administration's economic-stimulus plan a cut in taxes paid on stock dividends and instead will offer plans they say will better help middle-income Americans.
President Bush is scheduled to announce his plan Tuesday, and House Democratic leaders will present their plan Monday. Incoming House Minority Leader Nancy Pelosi, California Democrat, said the plan will include some way of putting money immediately into the pockets of Americans. She criticized the president's plan as failing to do that.
"I think what you see is the administration perhaps using the term 'stimulus' as a Trojan horse to wheel in some favorite tax breaks for the high-end that they're so fond of," she said.
Senate Democratic Leader Tom Daschle of South Dakota yesterday broke with tradition and released for publication today's Democratic radio response to the president's weekly radio address.
Mr. Daschle called the president's economic plan "the wrong idea at the wrong time to help the wrong people."
"I intend to do everything I can to replace this misguided plan with a proposal for immediate tax relief for middle-class families tax relief that will actually spur economic growth," he said.
By drawing those lines, Democrats and Republicans have set up the first big congressional battle for the next session, which opens next week. But Republicans said Democrats are miscalculating by hoping to make political gains with the economic issue.
"Playing class warfare and practicing the politics of economic destruction is not going to give this economy a shot in the arm or put people back to work," said Jonathan Grella, a spokesman for incoming House Majority Leader Tom DeLay, Texas Republican.
Mr. Bush's plan, totaling $300 billion over 10 years, will reportedly accelerate the tax-rate cuts called for in the $1.3 trillion, 10-year tax cut bill passed in 2001. It will also allow investors to exclude from taxation a portion of income from dividends.
The administration's plan gives House and Senate Republicans a central rallying point. Capitol Hill aides said the plan has been developed in conjunction with congressional Republicans.
Democratic leaders are united in opposing the president's dividends plan, but they are not on the same page in proposing an alternative.
Sen. Max Baucus of Montana, the ranking Democrat on the Senate Finance Committee, has introduced a $160 billion stimulus package and is reported to have told the White House that he was "open" to Mr. Bush's proposals to accelerate the 10-year tax cuts and to enact a plan to cut the tax on stock dividends.
Other Democrats, such as presidential candidate Sen. John Kerry of Massachusetts, have said they support a payroll-tax holiday. But Mrs. Pelosi said that will not be part of House Democrats' plan.
"That would take resources from the Social Security trust fund, so I would suggest something that would be the equivalent in dollars in the hands of the American people, especially America's working families, but would not come from the Social Security trust fund," Mrs. Pelosi said.
Mrs. Pelosi said she has made Senate Democratic leaders aware of her plan but did not say whether they supported her proposal.
Democrats are unified in one area: highlighting the poor job market as a symbol of the Bush administration's record on the economy.
Democrats on the House Appropriations Committee released a report showing that Mr. Bush is on track to have the worst record of job creation of any president in the past 50 years. Between January 2001 and November 2002 the nation lost 1.5 million jobs, according to the report, based on numbers from the Bureau of Labor Statistics.
Democrats have blamed Republicans for failing last year to work out an extension of unemployment benefits for the 800,000 whose coverage ran out Dec. 28 and the 100,000 who are expected to lose benefits each week.
Mr. Bush is expected to include benefits for them in his package, but Mrs. Pelosi yesterday called that "too little, too late."
"But we'll just see how little it is," she said.
Mr. Bush this week said his concern is policies, not politics.
"I understand the politics of economic stimulus. If some would like to turn this into class warfare that's not how I think. I think about the overall economy and how best to help those folks who are looking for work," he said.

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