Senate Democrats set committee vote on economic stimulus plan without Republican support

By CURT ANDERSON
AP Tax Writer

WASHINGTON – Senate Democrats decided Tuesday to forge ahead with a committee vote this week on a $67 billion economic stimulus package that has scant Republican support.

Many Democrats acknowledge the package will have a tough time becoming law.

Just as House Republicans did last month with a $100 billion measure heavy on business tax cuts, Senate Democratic leaders are abandoning any effort to negotiate a deal with the other party as both sides try to respond to an economic downturn.

Instead, they will bring to the Senate Finance Committee a measure containing fewer business tax breaks than the House and President Bush want as well as more aid for the unemployed, including a temporary health insurance subsidy. It also contains one piece common to all the plans: a new round of rebate checks aimed primarily at lower-income workers.

The Democratic bill includes tax breaks intended to help New York City recover from the Sept. 11 terrorist attacks and $6 billion for farm disaster payments and rural development projects.

"We tried for weeks to reach a bipartisan agreement," said Senate Majority Leader Tom Daschle, D-S.D. "We were left with no recourse. ... We need to get this process under way."

Republicans strongly objected, contending that Democrats were mainly interested in pushing a bill that appeals to their political constituencies, including labor unions and working-class voters. Sen. Charles Grassley, R-Iowa, urged a resumption of bipartisan talks to avoid a "train wreck" once the bill reaches the Senate floor.

"That's where we're headed, it seems to me, in the partisan approach that's being taken," Grassley told reporters.

Sen. Max Baucus, chairman of the Senate Finance Committee, said the panel would vote on the legislation Thursday, with floor action possible as early as next week. Baucus, D-Mont., obtained pledges from each of the committee's Democrats – and most crucially, independent Sen. James Jeffords of Vermont – to support the bill in committee and oppose all amendments.

A leading moderate, Democratic Sen. John Breaux of Louisiana, said the Democratic bill would make it out of committee "barely" but was unlikely to pass the full Senate. The legislation would probably require 60 votes to overcome opponents' blocking tactics.

"We can't pass a bill unless there's going to be a compromise," Breaux said.

Democrats also want to tack on $20 billion in spending for homeland security.

Both sides have called for Bush to get directly involved in Senate negotiations, but so far the president has opted to wait until a bill actually passes. That would set up high-stakes talks on a final bill with the Republican-led House, which has drawn broad Democratic criticism for muscling through a bill filled with long-cherished GOP tax relief goals.

Highlights of the Democratic bill include:

– Rebate checks of up to $300 for individuals, $500 for heads of households and $600 for married couples for about 28 million taxpayers who did not receive a check from the tax cut signed into law in June. Another 17 million taxpayers who got partial rebates the first time would get the remainder. Cost: $14 billion.

– A 13-week extension of unemployment benefits and coverage for part-time workers. Cost: $14 billion.

– A one-year, 75 percent health insurance subsidy for workers who have lost coverage due to layoffs; a state option to cover jobless workers not eligible for COBRA policies; and a temporary increase in the federal match to states for Medicaid coverage. Cost: $10 billion.

– Several business tax breaks, including 10 percent immediate expensing for 2001 for certain investments and improvements; increasing the expensing ceiling for small businesses from $25,000 to $35,000 in 2002 only; and increasing from two years to five years the time frame for businesses suffering 2001 losses to offset past profits. Total cost: $21 billion.

– A package of wage tax credits, tax-exempt bonds and other incentives aimed at helping New York City recovery efforts. Cost: $2 billion in 2002; $5 billion over 10 years.

– For agriculture, re-establishment for fiscal year 2002 only of a disaster-related financial aid program for farmers and $3 billion "to clear the backlog" of rural development loan and grant applications. Total cost: $6 billion.

AP-WS-11-06-01 1754EST