US Congress Tries Again On Stimulus Package

by Mike Godfrey, Tax-News.com, New York

25 January 2002

Following the Congress's regrettable failure to agree on a stimulus package before the Christmas holidays, Senate Democratic Leader Tom Daschle of South Dakota said he hopes to get his scaled-back version of an economic stimulus package approved by the Senate by the end of the week. In a letter to Bush yesterday, Daschle proposed Congress pass a bill that would extend unemployment benefits by 13 weeks, provide tax rebates for those that did not receive a rebate in Bush's $1.35 trillion tax cutting package, extend extra funds to struggling states and provide a bonus depreciation for corporate capital expenditures.

"I, in all fairness and in all hope of achievement here, would like to see us get this done this week. I really don't know why it would take any longer than a couple of days to move on a bill that both sides have already indicated they support," Daschle told reporters on Capitol Hill after discussing his plan with Democratic colleagues. He said his plan would cost $69bn in the first year, but the cost would be reduced to $26bn over 10 years, substantially less than the Republican plan passed by the House of Representatives in December.

Daschle said he tentatively proposed a plan to Senate Republican Leader Trent Lott of Mississippi that would bring his proposal straight to the Senate floor for a vote, bypassing the Senate Finance Committee, but allowing each party four amendments.

The Bush administration has said Daschle's proposal is a starting point, but prefers a more "comprehensive" economic stimulus package that includes tax cuts not included in Daschle's plan. Presidential aide Ari Fleischer said that Daschle's proposal falls short of what President George Bush believes would be the best way to stimulate the economy, which includes quicker implementation of tax cuts passed last year.

"But at the end of the day, the president believes a comprehensive package is best," Fleischer said, adding "the president believes that we need to have a comprehensive package that focuses on job creation, as well as help for people who have lost their jobs."

Trent Lott said on Wednesday he had not made a decision on whether the Republican senators would to try to block Daschle from forcing a vote on his proposal. "Well, we haven't made a final decision. We're talking to each other," Lott said, "but we just started these discussions, really, 24 hours ago, and we're going to work through it this afternoon."

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