CHN: Daschle Tries to Revamp Economic Stimulus Debate
Legislative Success Uncertain At Best
Portrayed by Republicans as an “obstructionist” for failing to push an economic stimulus package through the Senate before the winter recess, Majority Leader Tom Daschle (D-SD) recently tried to revive negotiations by proposing a watered-down stimulus bill. Senator Daschle’s proposal contains items that the two parties have previously agreed to, including tax rebates for low-income workers who did not receive them last year as part of the $1.35 billion tax cut; a 13 week extension of unemployment benefits for laid-off workers; a one year 30-percent bonus depreciation of some business expenses; and $5 billion in Medicaid funding to the states to provide health insurance coverage.
Daschle introduced his proposal on the Senate floor as an amendment to an adoption tax credit bill. The Senator’s attempt to limit the number of amendments offered to the bill failed, with Republicans voting against the motion as part of a bid to slow progress on the legislation until the President outlined his economic stimulus proposal in his State of the Union address. Republicans also want to see the tax cuts contained in the $89.8 billion proposal (HR 3529) passed by the House last month included in the Senate bill.
In his address January 29, President Bush called on Congress to pass a stimulus package of tax cuts and unemployment benefits similar, we can assume, to HR 3529, which he has endorsed. However, in recent testimony before the Senate Budget Committee, Federal Reserve Chairman Alan Greenspan asserted that an economic stimulus package was not “critically important” because the economy “will recover in any event.” Many lawmakers will view Greenspan’s statements as reason to abandoned action on stimulus legislation.
Most anti-poverty advocates join those on the Hill who continue to argue that it is critical to deliver relief to the unemployed this year. Despite predictions of a recovering economy, analysts at the Economic Policy Institute warn that the modest growth projected will not be enough to quell the rising tide of unemployment. The institute predicts that the unemployment rate will climb from its current 5.8 percent rate to 6.5 percent by the fall, and remain in the 6 percent range through next year.
Before recessing for Democrat and Republican party retreats January 29, the Senate did approve an amendment offered by Max Baucus (D-MT) and Gordon Smith (R-OR) to allow businesses to take a 30 percent deduction in the purchase of equipment in 2002 and 2003. This represents an extension of Senator Daschle’s original proposal, which limited the 30 percent deduction to items purchased between September 11, 2001 and September 11, 2002. The Baucus-Smith amendment would also increase Medicaid payments to the states. Senate debate on the economic stimulus bill will resume next Tuesday, February 5th.