WASHINGTON – On Congress' second day back from winter recess, the Senate began debate on compromise legislation to pump up the already-recovering economy.
Senate Majority Leader Tom Daschle, D-S.D., proposed a $69 billion economic stimulus package that draws on several measures taken from Democratic and Republican wish lists, including a 13-week extension of unemployment benefits and a new round of rebate checks for low-income earners.
"The whole purpose of this exercise is to find common ground," he told reporters Thursday.
Republicans, however, complained that the handpicked measures in Daschle's proposal largely ignored their favored accelerated income tax cuts and corporate tax breaks.
"What's before us today is not comprehensive," charged Sen. John Kyl, R-Ariz. "I don't think we can say with a straight face that this is an economic stimulus package."
Debate on the measure, which is a pared-down version of legislation introduced three months ago, comes as the chairman of the Federal Reserve Board told a Senate committee that an economic stimulus plan may not even be necessary any more.
Fed head Alan Greenspan said he is "conflicted" about whether the economy still needed a boost from the federal government.
"I don't think it is critically important to do," Greenspan told the Senate Banking Committee. "I think the economy will recover in any event."
Greenspan did say that if a recovery is sluggish, a stimulus could provide an added boost, but it is certainly not as crucial as when it was introduced three months ago.
Still, President Bush will continue to pressure the Democratic-led Senate to act on broader stimulus legislation.
"There are still clouds on the horizon ... and the president prefers to err on the side of creating jobs," said White House spokesman Ari Fleischer.
Daschle, who was largely blamed for the impasse in December over a Republican-backed economic stimulus package that passed the House but was not permitted to come to a vote in the Senate, said he was "moving the ball forward" on legislation in order to spark the flagging economy.
Tax cuts are the major bone of contention between the two parties. In a widely-touted speech two weeks ago, Daschle blamed the current recession in part on the president's tax cut implemented last year, which resulted in $300 and $600 rebate checks sent to taxpayers over the summer. He did not call for its repeal, but suggested that further tax cuts, already approved in the legislation, could worsen the situation.
Republicans argue that Democrats don't offer enough tax breaks that would be used as stimulus to get companies buying equipment and hiring employees.
Their plan would provide $87 billion in stimulus, including aid to the unemployed and tax breaks for both business and individual earners. Some Republicans have indicated that they may be able to work with a bill that removes the alternative minimum tax repeal they had pushed earlier.
Whether Daschle will allow amendments to the bill remains to be seen.
Bush is expected to give his State of the Union address on Tuesday, in which he will outline his views on how the economy can recover.
The Associated Press contributed to this report.
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