The New York Times-20080124-Bush and Congress Nearing a Deal on Stimulus
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Bush and Congress Nearing a Deal on Stimulus
Congressional leaders and the Bush administration were close to reaching a deal on a $145 billion economic stimulus package on Wednesday night as the Treasury Department crunched the numbers on components of the plan, senior House officials said.
Speaker Nancy Pelosi of California met three times Wednesday with Treasury Secretary Henry M. Paulson Jr. and the House Republican leader, Representative John A. Boehner of Ohio, who have served as chief architects of the plan in a rare show of bipartisanship.
On her way into an evening meeting, Ms. Pelosi said there had been tremendous progress during the day.
I'm hopeful, she said. We're still working through.
Democrats said the centerpiece of the plan would be a widely distributed tax rebate, perhaps totaling as much as $96.5 billion or roughly two-thirds of the total amount President Bush has said is needed to help jumpstart the economy. Aides cautioned, however, that the numbers were the subject of intense negotiations.
Mr. Bush, after meeting on Wednesday with mayors from across the country, said he was optimistic about reaching swift agreement on a stimulus plan.
I talked to them about my desire to work with the Congress to get a stimulus package passed, one that's going to be robust enough to affect the economy, simple enough for people to understand it and efficient enough to have an impact, Mr. Bush said. And I'm confident that we can get something done.
Democratic leaders said that to speed the economic rescue package they would mostly bypass the usual committee process. Lawmakers said that they hoped the plan could be approved by mid-February and that it would be sufficient to soften an economic downturn and forestall a recession.
One of the principal tenets of the administration and of ourselves is we have got to do this fast, Representative Steny H. Hoyer of Maryland, the majority leader, said Wednesday. To go through the regular process and have hearings and have mark-ups and subcommittee mark-ups, obviously we would be to some degree twiddling our thumbs while the economy burns.
While Mr. Paulson, Ms. Pelosi and Mr. Boehner were the chief negotiators, other lawmakers have sought to take a strong hand in the process.
Representative Charles B. Rangel of New York, the chairman of the Ways and Means Committee, was said to be lobbying intensively for any payment to be sent to all low-income Americans, including those who did not pay any taxes last year. Some Republicans say benefits should be only for taxpayers.
In a statement Mr. Rangel said, We must follow the guidance of so many economists who have said, with great clarity, that this package must put money back into the hands of the middle- and lower-income families who will then spend it directly into our economy.
Democrats said the stimulus plan would also include benefits favored by many Republicans, including a depreciation incentive to encourage businesses to make capital investments this year. The plan may also allow businesses to spread operating losses incurred this year back over five years instead of the two years permitted under current law.
House Democrats said the plan would include an extension of unemployment benefits and a temporary increase in food stamp benefits, which many Democratic lawmakers have said are the two best-proven means of quickly stimulating the economy.
But there was still disagreement, particularly over a desire by some Republicans to include provisions that would delay components like the extension in unemployment insurance coverage until unemployment worsened to some predetermined level.
Representative Barney Frank, Democrat of Massachusetts and the chairman of the Financial Services Committee, said the worldwide stock market declines this week and the move by the Federal Reserve to lower interest rates by three-quarters of a percentage point had made it clear that there should be no delay.
The trigger has already been pulled, Mr. Frank said in an interview.
While the Ways and Means Committee has focused on the tax rebate and figuring out the quickest way to deliver the money, Mr. Frank and his committee have been developing a plan intended to avoid a huge increase in home foreclosures. The progress on the stimulus plan came as the Congressional Budget Office revised its economic projections to give a gloomier assessment of the economy, including a widening budget deficit and the first decline in corporate tax revenue since 2003.
The grimmer outlook prompted Senator Kent Conrad of North Dakota, chairman of the Budget Committee, to declare that a short-term stimulus package was insufficient.
In addition to developing a bipartisan stimulus package, Mr. Conrad said, we also must work together to tackle the long-term fiscal challenges we face with the coming retirement of the baby boom generation. The American people rightly expect that we will come together to address these two significant challenges.
House conservatives raised alarms about the emerging economic legislation, saying they feared it would focus too much on tax rebates and not enough on tax incentives to encourage businesses to create jobs.
They said any package should include provisions that would reduce the corporate tax rate, adjust capital gains for inflation and lower the capital gains rate for corporations.
Giving temporary tax rebate checks to families, as important as that is, is not the same as economic growth, said Representative Jeb Hensarling of Texas, chairman of the Republican Study Committee. If you're going to have an economic stimulus package, it ought to contain some economic stimulus.
[Illustration]PHOTOS: Representative Jeb Hensarling, left, a Texas Republican, talking about an economic stimulus.; Senator Harry Reid, the majority leader, at a news conference Wednesday on American cities. (PHOTOGRAPH BY BRENDAN SMIALOWSKI FOR THE NEW YORK TIMES)