Democrats Propose Economic Stimulus Package
WASHINGTON – Congressional Democrats unveiled their economic stimulus plan Monday, a day before President Bush was to offer his proposal for getting the economy rolling, an effort that Democrats already declared irresponsible and a break that benefits only the wealthy.
"We believe we have a package that has clarity, that has credibility, and has consensus within our caucus," said House Democratic Leader Nancy Pelosi of California.
The Democratic package includes eight specific proposals that will cost $136 billion in fiscal 2003, but some costs will be recouped over a 10-year period, lawmakers said. The net cost over those 10 years is estimated at $100 billion.
Click here to read the Democratic Economic Stimulus Plan.
"This package that we're unveiling today is a stimulus package ... it's aim is to get the economy moving and to get people back to work and it's true to its mission," said incoming Assistant Minority Leader John Spratt of North Carolina. "It's frontloaded and fast acting … we believe our proposal will have more impact in the year 2003, when the economy needs it."
The plan includes extending unemployment benefits for 26 weeks. Democrats want this provision to be included in a continuing resolution to be taken up by Congress when it returns this week.
Sen. Rick Santorum, head of the Senate Republican Conference, said Monday that Republicans would like to see unemployment benefits extended as the first order of business when Congress convenes on Tuesday. He said that extending benefits until May may "be reasonable."
The Democratic plan includes a tax rebate of up to $600 for couples who file jointly and $300 for individuals.
Small businesses would also get a boost under the plan. Whereas under the current tax code they are only allowed to write off up to $25,000 of work-related purchases a year, the Democrats' plan would allow small firms to write off $50,000 in 2003.
The plan also gives up to $30 billion in assistance to states, $10 billion of which would go toward homeland security projects, such as increasing airport or rail security and equipping first responders.
Another $5 billion would go toward state highway departments for already scheduled projects and $10 billion would go toward helping states bear the brunt of Medicaid costs for one year.
"You need something like this -- dramatic and pointed -- to get the message across," Spratt said. "The first objective by far is to put people back to work."
The plan does not include eliminating the tax on dividends, which is a centerpiece of the economic stimulus package the president was to outline to the Economic Club of Chicago on Tuesday.
Pelosi called the Democrats' plan "a real stimulus that is fair, that is fast-acting and that is fiscally possible."
"In the Bush administration, joblessness is rampant," Pelosi said during a press conference where party members detailed their stimulus proposal. "It's the first presidency in modern history where jobs are going below the line instead of increasing."
Speaking at the bottom of a Cabinet meeting Monday, Bush said his economic stimulus plan would "speak directly to the American citizen that we will do everything we can to revitalize the economy."
White House spokesman Ari Fleischer said the president is working on a plan that will activate 500,000 jobs in the coming year while also giving tax benefits to 92 million Americans.
"The president's plan will encourage consumer spending, it will promote investment throughout our country and in the business community and in small business, and it will also help the unemployed," Fleischer said.
Bush's package is expected to include acceleration of tax cuts first approved by Congress in 2001, tax incentives to prompt more spending by businesses, aid to financially strapped states and extended unemployment benefits.
The president is also expected to propose eliminating the tax on corporate dividends, which companies hand out as profits to shareholders. That could take up about half the projected $600 billion, 10-year cost of the president's stimulus.
Rep. Bob Menendez of New Jersey said the Democrats' plan addresses the general population, not just those who invest in the stock market and the upper class.
"The Democratic plan stimulates, the president's plan procrastinates," Menendez said. "Our plan helps Americans of all walks of life."
Spratt said estimates, including even one by Bush's own Council of Economic Advisors, show the Democrats' plan will create at least a million jobs.
As with most policy proposals, both sides will have to give up something to get something.
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, whose committee will usher through the stimulus bills, said that with only a 51-seat majority, he can't expect every senator to stay in line.
"I am chairman of the committee. I am going to have to have the flexibility to reach out to Democrats to get things done," he said.
Bush said that "it doesn't matter who is in charge" of the Congress, as long as it acts quickly on getting a stimulus bill to his desk.