Many Layers to Economic Stimulus

Senate Republicans say their stimulus plan is one that abides by President Bush's principles for economic growth and they're sticking to it — with just one little wrinkle.

They say their plan is for $75 billion, the same sum the president called for, but they don't count $14 billion in the first year for tax relief to low-income workers who don't pay income taxes, which they also propose just as the president did. 

So the real cost is $89 billion but is not included so it can be used as a negotiating tool with Democrats.

Both Senate Finance Committee Chairman Chuck Grassley, R-Iowa, and Minority Leader Trent Lott, R-Miss., said any stimulus package should not exceed the President's proposed $75 billion. The House bill, passed on a razor-thin partisan vote last week, provides for $100 billion in economic stimulus, an amount that Grassley said goes "far over what the president wanted. We ought to stay within $75 billion."

Bush administration officials welcomed the Senate GOP approach.

"We certainly think the Senate [GOP] is headed in the right direction," said Mark Weinberger, assistant treasury secretary for tax policy.

Other elements of the Senate GOP plan include accelerated tax cuts of $27 billion; a 30 percent write-off of equipment expensing worth $39 billion; and a repeal of the corporate alternative minimum tax, worth about $9 billion. That comes to $75 billion. A rebate to low-income workers would be on top of that.

Senate Majority Leader Tom Daschle, D-S.D., said the stimulus doesn't go far enough to help displaced workers.

"There will be no economic stimulus unless there is help for the unemployed ... to do anything less is a mockery of the economic stimulus."

Daschle supports a failed House Democratic plan that offered health benefits to unemployed workers as well as cash payments and unemployment handouts also provided to states in the House Republican plan.

Asked why he takes issue with the Republican plan, Daschle said: "The Republican plan offers too little too late."

Some GOP moderates also are not on board. Sen. Lincoln Chafee, R-R.I., said his main objection is that the legislation's long-term cost of $175 billion because of tax breaks could plunge the government into chronic deficit spending.

"We saw the surplus evaporate before our eyes and we've still got numerous challenges in front of us," Chafee said.

As Democrats and Republicans grappled over the stimulus plan, two senators proposed that the package include a national sales tax holiday.

Sens. Olympia Snowe, R-Maine, and Patty Murray, D-Wash., said the 10-day holiday could apply in 45 states and the District of Columbia, all of which levy a sales tax; the federal government would reimburse them for up to $6.5 billion in revenue.

But Senate Republicans argued that the principles of the current GOP plan will have the best and most immediate impact by providing stimulus as well as assistance.

"The Democratic proposal ... takes care of people when things are bad but does nothing to make things better. That's not a balanced package," said Sen. Rick Santorum, R-Pa. 

While both sides now seem far apart on an economic stimulus package, they agreed that it is impossible to end the year without a stimulus.

"The Democratic leadership said over the weekend that the economic stimulus is not a high priority ... we feel it is. What this economy needs is a booster shot to inoculate us against a long-term recession," Grassley said. 

"I don't think we ought to even consider no economic stimulus ... what we want is real, meaningful help," Daschle said.

Daschle said he expects a stimulus package out of committee this week and on the floor next week.

Fox News' Jim Angle and Julie Asher and The Associated Press contributed to this report.