WASHINGTON, Dec. 12 (UPI) -- President Bush again Wednesday tried again to pressure the Senate into passing an economic stimulus package that he has said would reverse the nation's stagnant economic outlook and shore up the dwindling government surplus as the nation fights a war.
But after a meeting with the president early Wednesday, Senate Majority Leader Tom Daschle, D-S.D., said there are still "difficult issues" at stake in the package, but he pledged "to make out best effort in the next 48 hours to do all we that we can to see if we can to see if we can reach an agreement."
"The Democrats' biggest concern, I think, is how we address all of those seven and a half million unemployed workers, many of whom are temporary or late hires who need the help, both in health insurance as well as unemployment compensation. And we're trying to find a way with which to do that, as well as stimulate the economy through additional tax cuts," Daschle told reporters after his meeting with Bush.
Despite several efforts at a compromise, the Democrats and Republicans remain at odds over whether tax cuts or direct payments to Americans would be the best way to spark economic recovery. Bush has offered a compromise that give some direct payments and reduce a package of tax breaks for business, but Senate Democrats want the want government to give money more directly to unemployed Americans.
"Let me tell you, the average recession is 11 months; we're now nine months in it. The average increase in unemployment -- and unemployment tends to increase 15 months after the bottom of a recession -- turn in a recession," said Sen. Jon Corzine, D-N.J., a member of the Joint Economic Committee. "We're talking about almost a year and a half now into the future for working families to really get the benefit of what would be that economic recovery,"
As the partisan debate on an economic stimulus package continued on Capitol Hill and President Bush met Wednesday afternoon with senior economic advisor Lawrence Lindsey, U.S. Department of Treasury Secretary Paul O'Neill and Office of Management and Budget Director Mitch Daniels for talks on the faltering U.S. economy.
"I've just met with my top economic team to discuss the importance of an economic stimulus package to the future of our economy," Bush said. "We strongly agree that we need an economic stimulus package, and I'm hopeful we'll be able to achieve one."
The president wants a bill on his desk, he says, before lawmakers leave town for the Christmas holidays.
On Tuesday, White House gave its tacit approval to a compromise package brokered by Republican and Democratic moderates in an effort to break the stalemate on the bill stalled in Congress for nearly three months.
"We agree that there is enough votes to get a good package out of the Senate, a package that I think will help our economy, a package that these Democrats and Republicans think will help workers and the economy," the president said. "And I am hopeful that with good work with the people around this table and with the leadership out of the Senate and the House, that we'll get a good package."
The U.S. House of Representatives in October approved a stimulus package backed by Republicans and the White House. That version has four key provisions. It would repeal the corporate alternative minimum tax, cut the 27 percent income tax rate to 25 percent in 2002 rather than 2006, and allow greater business equipment purchase write-offs. It also would provide tax rebates for low-income workers.
But Senate Democrats opposed the corporate alternative minimum tax, wanting instead expanded benefits for jobless workers. Democrats also have favored a stimulus package that would provide assistance for displaced workers.
Bush's plan would have helped states offer Medicaid to uninsured workers in need and their families. It also would offer emergency grants to states to help displaced workers receive job training and find new work, and continue their health insurance.
As alternative compromises were brought to the table to foster quicker passage, House Majority Leader Dick Armey, R-Texas, wanted to repeal the minimum tax while Daschle supported a plan by Sen. Pete V. Domenici, R-N.M., for a one-month payroll tax holiday.
The bipartisan version presented to the president Tuesday by GOP moderates Sen. Olympia Snowe and Susan Collins, both Maine Republicans, and Sen. John Breaux, a Louisiana Democrat, apparently wasn't enough for Democrats.
The president embraced the idea to expand unemployment benefits for workers displaced since March 15, allow tax credits that can be used to purchase health insurance on the open market, and pare the 27 percent income tax rate to 25 percent. The proposal does not include a corporate alternative minimum tax. It also drops the trigger providing displaced workers with expanded benefits in states with a 30 percent hike in unemployment.
Martin Anderson, a former economic advisor to Bush's campaign spent six months helping to construct Bush's $1.35 trillion tax cut plan. Anderson told United Press International he did not understand why the White House was pushing for AMT or other versions of a stimulus package.
"They should go back to the original tax cut -- which they passed -- and put it into effect," said Anderson who also served as President Ronald Reagan's economic policy advisor. He said it may cause a temporary deficit but without it, running the war in Afghanistan would be tougher. "You cannot run war and continue to rebuild the military without a strong economy."
Anderson called using unemployment benefits to spur the economy as the "absolutely wrong" wrong reason to provide them. "That is analogous to saying the way to get economic recovery is to increase welfare payments," Anderson said.
