WASHINGTON – Top House leaders and Treasury Secretary Henry Paulson Wednesday tallied the cost of measures to jolt the economy out of its slump as the three sought a swift bipartisan deal on a recovery package that could move through Congress within weeks.
House Speaker Nancy Pelosi, D-Calif., and Minority Leader John Boehner, R-Ohio, are taking the lead in Capitol Hill negotiations, with the centerpiece of the measure expected to be a tax rebate similar to, but bigger than, the $300-$600 checks sent out in the summer of 2001. The two huddled for a lengthy working breakfast at the Capitol with Paulson, Bush's point man on the package, and planned another gathering this afternoon.
"We looked at a lot of different options," Boehner told reporters, adding that the threesome reached "no conclusions or agreements." He said it would "require a great leap of faith" from both parties to find common ground.
Senior lawmakers in both parties met on Tuesday with President Bush, who has proposed a stimulus plan worth about $150 billion. Combined with Iraq war costs and decreasing corporate tax revenues because of the economic slump, a package that size would more than double last year's deficit spending of $163 billion, according to new congressional budget estimates.
Bush expressed optimism that his administration can reach quick agreement with Congress.
"I believe we can find common ground to get something done that's big enough, effective enough so that an economy that is inherently strong gets a boost — to make sure that this uncertainty doesn't translate into more economic woes for our workers and small business people," Bush said Tuesday in the Cabinet Room.
In Davos, Switzerland, Secretary of State Condoleezza Rice told the World Economic Forum that the U.S. economy was resilient and would remain an "engine of growth." Speaking to an audience of chief executives and world leaders, Rice said that the stimulus package that Bush proposes would "boost consumer spending and support business investment this year."
Pelosi, Boehner and Paulson are working on hammering out details. Senate leaders Harry Reid, D-Nev., and Mitch McConnell, R-Ky., have agreed to stand back and let the House take the lead in the talks with the administration.
In the Senate, Reid said in an interview, "There are too many cooks in the kitchen. Send something over to us and we'll try to move it as quickly as we can."
Perhaps the most important obstacle to overcome is differences of opinion over who should receive rebate checks. Democrats want to deliver help to low-income workers who may not pay income taxes because they make too little or benefit from tax credits such as the child tax credit.
Thus far, talks have focused on setting the parameters of a bill combining rebates with GOP-sought tax breaks for businesses, as well as Democratic-backed help for the unemployed and those on food stamps.
Talks continued as the nonpartisan Congressional Budget Office, citing the weakening economy, estimated that the budget deficit for the current year will jump to about $250 billion. That figure does not reflect at least $100 billion in likely additional red ink from the deficit-financed economic stimulus measure.
Senate Budget Committee Chairman Kent Conrad, D-N.D., said the 2008 deficit would reach more than $350 billion once the costs of the upcoming stimulus bill are factored in.
Both sides have seemed to negotiate in good faith. Republicans and Bush declined to insist on extending Bush's 2001 and 2003 tax cuts that expire in three years, while Democrats offered up tax breaks for business and limited their roster of spending proposals. Democrats also agreed to waive budget rules requiring tax increases to finance the measure.
Noting the aura of bipartisanship surrounding the talks, Rep. Eric Cantor, R-Va., said Democrats "are seeing the same polls as we are."
On a visit to Cairo Wednesday, Energy Secretary Samuel Bodman told reporters that high oil prices are starting to adversely affect the U.S. economy.
"The economy has been able to withstand it until now," Bodman said. "I believe the 100 dollar price of oil is starting to have an impact," he said.
Bodman has been touring the Middle East to talk about energy, security and other issues.
Oil has retreated from a record high of above $100 barrel earlier this month and is now trading at around $88 a barrel on concerns that a slowing U.S. economy would reduce energy demand.