Options Floated for Economic Stimulus

Top lawmakers hope to ready an economic stimulus plan in three weeks or less for Americans who lost their jobs after the terrorist attacks.

President Bush on Thursday proposed extending unemployment benefits and offering $3 billion in grants to those thrown out of work by the Sept. 11 attacks.  The proposal comes as part of his $60 billion-$75 billion package he offered Wednesday.

But since the annoncement, partisan disagreements have developed over the mix of tax cuts and new spending that was needed, whether Bush's plan to help the jobless would go far enough, and other details.

Even so, cooperation between Republicans and Democrats remained noteworthy.

With Treasury Secretary Paul O'Neill present as the administration's point man, leading lawmakers from both parties are meeting regularly to begin piecing together legislation aimed at reinvigorating the economy. The consensus seems to be a plan costing up to $75 billion, the figure Bush suggested.

Emerging from one session on Thursday, both Senate Finance Committee Chairman Max Baucus, D-Mont., and the panel's top Republican, Sen. Charles Grassley of Iowa, said they hoped to have a package ready in two or three weeks.

"We're a lot further along," Baucus told reporters, citing "concepts and approach and tone and mood and desire to act quickly."

At that meeting, O'Neill suggested options including tax rebates and accelerating the 1 percentage point reduction in the 27 percent income tax rate that is currently scheduled to occur in 2004, said congressional aides familiar with the session.

Democrats are interested in tax breaks for workers who earn too little to have received rebate checks already this year. They seem likely to oppose the 27 percent tax bracket cut because only the top 24 percent of income-earning households pay at that rate.

From every faction on Capitol Hill, proposals are being floated on the stimulus package's composition, underlining that partisan pressures -- though less than usual -- remain in play.

A group of conservative House Republicans backed by House Majority Whip Tom DeLay, R-Texas, proposed an economic package containing strictly tax cuts.

"A meaningful economic stimulus package must focus on creating opportunity, not expanding government spending," DeLay said.

Sen. Paul Wellstone, D-Minn., suggested $85 billion in tax rebates and new spending for job training, school construction and other items. A group of House Democrats and Republicans proposed an extension of jobless benefits that would reach many more people than Bush's plan.

And stressing the need to avoid a return to a long period of annual deficits, the top Republicans and Democrats on the House and Senate Budget committees proposed limiting the stimulus package to one year and suggested that budget savings be found in future years.

With more than 200,000 layoffs announced in the past three weeks alone, Bush proposed new benefits for Americans who have lost their jobs since the Sept. 11 attacks. 

The president unveiled a $3 billion program that governors could use for job training, day care, income supplements and health care premiums. Bush needs congressional approval for the health care component.

He also proposed extending unemployment benefits by 13 weeks in states hit hardest by the attacks. Most states now cover workers for 26 weeks.

The White House said Congress must approve that extension, which would expire in 18 months.

Democrats welcomed the proposals, but suggested they did not go far enough.

"I'm not sure that it covers all of the different needs we have with regard to people who fall through the cracks on unemployment compensation," said Senate Majority Leader Tom Daschle, D-S.D.

Under Bush's worker-relief plan, people who were working on Sept. 11 and are not eligible for regular unemployment benefits would qualify for the $3 billion grant, and would also be required to enroll in government-run training programs.

The additional 13 weeks of unemployment benefits would be made available to states where joblessness has risen by 30 percent since the end of August, and in states where the president declared a national emergency or major disaster due to the attacks.