House passes economic stimulus package that faces probable failure in the Senate

By Curt Anderson

Associated Press

WASHINGTON – A top Senate Democrat lampooned a House-passed package of tax cuts and unemployment aid on Thursday, as the Republican-written plan for lifting the recession-hobbled economy seemed certain to die.

President Bush urged the Senate to act, instructing Treasury Secretary Paul O’Neill to telephone Senate Majority Leader Tom Daschle and plead the administration’s case. The House passed GOP legislation just before dawn Thursday after meeting much of the night.

“The president thinks that the fate of the economy and the prospects to help the unemployed are too important for anybody to declare it dead,” White House press secretary Ari Fleischer said.

But Harry Reid of Nevada, the Senate’s No. 2 Democratic leader, dismissed the House GOP package as “laughable.”

Reid said the House vote was staged strictly for political purposes, with Republicans aware it had no chance of clearing the Senate.

“I hope the American public understands the charade, and that’s what it is,” Reid said.

House Speaker Dennis Hastert, R-Ill., on Thursday accused the Senate of walking away from legislation that helps Americans suffering from the economic slump. “If I was president I’d call the Congress back the 2nd day of January and finish the work.” Congress is not scheduled to return from their winter recess until Jan. 23.

Earlier, Sen. Charles Grassley of Iowa, senior Republican on the Senate Finance Committee, said the House measure deserved a vote.

“This is bipartisan social policy everybody agrees needs to be done,” Grassley said.

But Daschle, D-S.D., offered no guarantee of a vote, labeling the bill’s business tax cuts too large and its jobless health insurance subsidies too weak.

It appeared improbable that President Bush and Senate Republicans could muster the 60 votes necessary to prevent Senate opponents from blocking the bill, which the White House has sought since shortly after the Sept. 11 terror attacks.

“They can be sure it will never, never, never become law,” said Rep. Charles Rangel of New York.

Bush kept up the pressure, issuing a pre-dawn statement: “For the sake of America’s workers, I call on the Senate to act now on this plan, which can pass the Senate with a bipartisan majority if it is brought up for a vote. If this bipartisan bill gets to my desk I will sign it.”

There remained sporadic efforts at achieving a bipartisan compromise, but the chances of that dwindled as Congress struggled to recess for the year. Nonetheless, the issue could resurface when lawmakers return in late January.

The House legislation, which would provide $218 billion in economic stimulus and jobless aid over the next three years, passed at shortly before 4 a.m. EST Thursday by a 224-193 vote. Only nine Democrats joined nearly all Republicans in support.

It would extend unemployment benefits by 13 weeks for those laid off since the March 15 onset of economic recession and provide a 60 percent, upfront tax credit unemployed people could use to help pay for health insurance. People who didn’t get a tax rebate this summer would get a check of up to $600.

The 27 percent income tax rate would drop to 25 percent on Jan. 1, four years ahead of schedule. That rate applies in 2002 to taxable income between $27,950 and $67,700 for individuals, $46,700 and $112,850 for married couples.

Businesses could write off 30 percent of new investment in each of the next three years, small businesses would have a higher expensing write-off limit of $35,000 for two years and corporations would get $13 billion in relief over 10 years from the alternative minimum tax. There would also be aid to help New York City recover and $4.6 billion for states to use for health care needs.

Republicans said these provisions reflected their concessions on numerous Democratic priorities, forming a combination that would help the unemployed make it through temporary hard times and spur investment that would lift the economy and create more jobs.

“The engine in this country that creates jobs is the magic of people taking capital and creating wealth,” Hastert said. “We should get it done.”

Democrats countered that the bill was chock full of unwise Republican tax cuts aimed at their business and wealthy constituencies that would drive up the federal deficit. But the biggest Democratic objection came over the health insurance tax credit, which they said was insufficient to cover all laid-off workers and would subject people to an uncertain open marketplace.

“We don’t think a tax credit alone will effectively deliver the aid that’s needed,” said House Minority Leader Dick Gephardt, D-Mo.

The House passed its first economic stimulus package in late October, but it didn’t include the unemployment benefit extension or the health insurance tax credit – and it did include billions of dollars in refunds to corporations for alternative minimum taxes they paid as far back as 1986. Republicans pushed through the second bill in part to give uneasy lawmakers are more satisfactory product to stand behind.

“Republicans have given a lot,” said House Ways and Means Committee Chairman Bill Thomas, R-Calif. “But our Democratic colleagues have given very little.”