Deadlocked Senate Opens Debate on Economic Stimulus Package

WASHINGTON – Hoping to break a Senate impasse, Democratic and Republican leaders signaled willingness Tuesday to begin negotiations aimed at bridging the chasm between the two sides on how to stimulate the economy.

Just as the Senate opened debate, Majority Leader Tom Daschle, D-S.D., and Minority Leader Trent Lott, R-Miss., each said the only way to prevent failure is to convene high-level talks to include leaders from the GOP-dominated House and representatives of the Bush administration.

Democrats also want to avoid negotiations that could force them to concede their top priorities, which include 13 extra weeks of unemployment benefits and a federal match of up to 75 percent for health insurance available to the jobless.

"I have made it abundantly clear: We are not going to negotiate this more than once," Daschle said.

Bush, at his weekly White House breakfast meeting with congressional leaders, repeated his demand for lawmakers to "get it done," Lott told reporters. Bush has set a Nov. 30 deadline for a final bill, but it is far from certain that Congress will reach a compromise.

Underscoring the divide, key House Republican leaders said at a late-afternoon meeting they would prefer to negotiate after the Senate passes a bill. John Feehery, spokesman for House Speaker Dennis Hastert, R-Ill., said House GOP leaders were "leery of a budget summit which could explode the deficit." He said Senate Democrats "need to go back to the drawing board on their legislation because it is not a stimulus bill."

As it stands, both sides agree the votes don't exist to pass either the Senate Democrats' $67 billion package heavy on government spending or the House-passed $100 billion plan containing tax cuts President Bush wants.

There is only one major common area: mailing of a new round of rebate checks of up to $600, primarily for lower-income wage-earners. Yet at its core, each plan also contains enhanced depreciation write-offs for business, some help for the jobless and extension of several expiring business tax breaks.

"I still believe we're not far apart," said Sen. Charles Grassley of Iowa, ranking Republican on the Senate Finance Committee.

Critical sticking points include the Republican insistence on accelerating some or all income tax rate cuts now scheduled to take effect in 2004 and 2006. "That's going to create a lot of resistance," said Finance Committee Chairman Max Baucus, D-Mont.

Another problem is spending programs included in the Democratic bill, such as $6 billion for agriculture, $5 billion for state Medicaid, $6 billion for New York City recovery and authorization for $9 billion in Amtrak bonds. Many Republicans especially oppose inclusion of a 10-year, $15 billion package of homeland security items proposed by Senate Appropriations Committee Chairman Robert Byrd, D-W.Va.

That would tilt the package too far toward government spending and away from tax cuts, said House Ways and Means Committee Chairman Bill Thomas, R-Calif.

"It means there is that big tumor that has to come out" in any compromise talks, Thomas said.

Democrats were considering whether to attach the Byrd measure to the stimulus package on the Senate floor. Daschle said, however, he would consider another route as long as there was agreement it would be considered before Congress adjourns.

In addition, Baucus said there could be changes in some of the agricultural spending included in the Democratic bill, which critics have derided as farm-state pork that would help, among others, bison ranchers and pumpkin growers and would do little to stimulate the economy.

Senate Republicans are focused on four key proposals made by Bush: acceleration of the income tax rate cuts, repeal of the corporate alternative minimum tax, enhanced business expensing and the rebate checks.

Other ideas simmering beneath the surface include a proposal by Sen. Pete Domenici, R-N.M., to grant a temporary payroll tax holiday for workers and businesses that would be financed from general tax revenues and a package proposed by Senate moderates that would expand the bottom 10 percent income tax bracket and create a tax credit for health insurance.