Congressional negotiators work overtime to secure economic stimulus deal
Sunday, December 16th 2001, 12:00 am
By: News On 6
WASHINGTON (AP) _ Republican and Democratic negotiators worked a weekend of overtime in an effort to secure a so-far elusive agreement on legislation to stimulate the struggling economy.
``This is really hard because the lines are drawn so deeply by both sides,'' said Sen. Max Baucus, chairman of the Senate Finance Committee.
Baucus, D-Mont., met behind closed doors much of Saturday with House Ways and Means Committee Chairman Bill Thomas, R-Calif., to explore options. In many areas, Thomas said, ``we are close,'' but he said there were still many issues where fundamental differences remain.
President Bush and Senate Majority Leader Tom Daschle, D-S.D., took to the radio to stress the need for Congress to address the nation's economic ills before lawmakers leave for the year. Bush said 300,000 jobs could be saved next year if his revised plan is enacted.
Three main sticking points were blocking a deal: whether to accelerate some of the income tax cuts enacted earlier this year, how to get health insurance assistance to the unemployed and whether to repeal or adjust the corporate alternative minimum tax.
Bush and the Republicans want to cut the 27 percent income tax rate to 25 percent next year rather than over several years. Bush cited a report by his economic advisers that said that would provide $15.8 billion in tax relief next year for 33 million taxpayers, about a third of the nation's total.
The current 27 percent tax bracket begins at $27,950 in taxable income for an individual, $46,700 for married couples.
``Under this new idea, many middle-class families will see a rise in their take-home pay in just a couple of weeks,'' Bush said.
Many Democrats oppose accelerating any of the income tax cuts contained in Bush's 10-year, $1.35 trillion tax relief package. Daschle last week offered an immediate reduction to 26 percent; Republicans said that was not enough.
On health care, Republicans favor a 50 percent tax credit available right away so the unemployed could buy insurance. Democrats want to pay 75 percent of the costs of the policies available for laid-off people who had employer-provided coverage.
Bush has given up repealing the corporate alternative minimum tax, but House Republicans say it is essential so that companies can take full advantage of other tax breaks. Democrats, who roundly criticized a House GOP bill that gave companies billions of dollars in refunds of past minimum taxes, are willing to accept only limited relief from the tax.
A new offer put on the table Saturday by Baucus would keep the tax in place but allow companies to take several deductions and credits that are not now permitted. One Democratic source estimated the cost at $13.8 billion over 10 years, more than $7 billion less than a full repeal.
There is broad agreement to extend the 26-week unemployment benefits by an additional 13 weeks; Democrats also want to increase the amount paid by $25 a week.
Both sides want a new round of rebate checks of up to $300 for individuals and $600 for couples aimed at lower-income workers, as well as a range of business tax breaks that would allow companies more generous write-offs for new investments.