Bush, Congressional Leaders to Meet on Sagging Economy – Post No. 012208-2

Bush and the Economy

By ANDREW TAYLOR

President Bush and top congressional leaders will be looking for quick agreement on how to pump as much as $150 billion in tax cuts and government spending into the ailing economy to head off a recession.

House Speaker Nancy Pelosi, D-Calif., and leaders in both parties are scheduled to meet with Bush on Tuesday to discuss a stimulus bill providing tax rebates, business tax cuts and funding for a Democratic-led call for additional food stamp and employment aid.

Both sides already have displayed flexibility not witnessed last year in battles over spending, taxes and children’s health insurance. Lawmakers appearing on weekend televisions talk shows promised bipartisanship.

“There’s a real spirit of compromise in Washington right now, a spirit of, ‘Let’s get together, put away the bipartisan differences, because the economy is in poor shape,'” Sen. Charles Schumer, D-N.Y., said on “Fox News Sunday.” “There are many Democrats, frankly, who would rather not have business tax cuts. But again, no one’s drawing a line in the sand.”

Bush on Friday called for an economic growth package of about $145 billion, centered on tax cuts for business and rebates for individual taxpayers. He did not announce details, but administration officials are focusing on rebates of $800 to $1,600 for individuals and couples and so-called bonus depreciation to allow companies to deduct 50 percent of business investments made this year. He also supports help for small businesses with more generous write-offs on equipment purchases.

Democrats want the rebates to reach millions of lower-income families who pay only Social Security and Medicare taxes or who may not file income tax returns at all.

On Capitol Hill, talks between Pelosi and House Minority Leader John Boehner, R-Ohio, have focused on smaller tax rebates of perhaps $500 for individuals, bonus depreciation and small business expensing, as well as Democrats’ call for boosts in unemployment benefits, food stamp payments and the Medicaid health care program for the poor and disabled. It’s a rare display of bipartisanship that was not taken as a given when Washington buzz about a possible stimulus measure reached a tipping point two weeks ago.

Then, the White House adopted a cautious stance, saying that Bush hadn’t decided whether the economy was sour enough to require a fiscal jolt. Aides to Senate Majority Leader Harry Reid, D-Nev., initially fretted that any stimulus plan might get loaded up with a lot of unrelated junk and that GOP partisans would force politically difficult votes as the measure moved through that chamber.

But Pelosi stepped out first, insisting Congress would go forward. Bush and his GOP allies in Congress saw little choice but to go along.

But both sides have negotiated in good faith. Republicans and Bush declined to insist on extending Bush’s 2001 and 2003 tax cuts that expire in three years, while Democrats offered up tax breaks for business and limited their roster of spending proposals. Democrats also agreed to waive budget rules requiring tax increases to finance the measure.

The rush to produce an economic stimulus bill comes as recent data on the economy is increasingly negative and as the issue has become a top priority with voters.

The major players appear motivated chiefly by a desire to help people who are hurting as the economy sags. But the political benefits of looking responsive to demands by voters to do something about the economy are not lost on lawmakers and the White House at a time when approval ratings for both are in the gutter.

“We’d all like to have a better record. I don’t think any of us are particularly proud of the session of Congress just completed and we’d like to start things out on a better footing,” said Rep. Earl Pomeroy, D-N.D. “But I really do think it’s more like, ‘We’ve got to do something about the economy.’ This is a no-games deal.”

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