Daschle to unveil economic plan
WASHINGTON - Drawing a contrast with President Bush, Senate Democratic leader Tom Daschle intends to unveil an economic stimulus package anchored by a one-time $300 per-person income tax cut and billions in assistance to hard-pressed states, congressional sources said Thursday.
Other elements offer more generous tax breaks to businesses investing in new equipment and assistance for small companies that purchase health insurance, according to these sources, who spoke on condition of anonymity.
Overall, the proposals carry a one-year price tag of roughly $140 billion, far smaller than the $674 billion, 10-year plan backed by Bush, and exclude both the administration's call to eliminate the tax on stock dividends and its recommended acceleration in personal income tax cuts Congress approved two years ago.
Daschle intends to unveil his proposals in a speech Friday before the City Club of Cleveland. While they stand virtually no chance of enactment in the Republican-controlled Senate, they give Democrats an alternative to support during the coming debate over the president's recommendations.
Daschle's speech is part of a broader Democratic attempt to counter Bush's economic proposals.
House Democratic leader Nancy Pelosi proposed an alternative earlier this month, and she and Daschle plan a joint appearance on Monday that their offices described as a "pre-buttal to President Bush's State of the Union Address." Additionally, Sen. Max Baucus, D-Mont., the senior Democrat on the Senate Finance Committee, released a plan a month ago that blends tax cuts for individuals with aid to the states, and costs slightly more than Daschle's recommendations.
The Senate Democratic leader has been particularly critical of Bush's tax proposals, describing them as a plan to "leave no millionaire behind."
For his part, congressional sources said Daschle intended to propose a tax cut of $300 per adult and an additional $300 per child, up to two children per family. Adults would qualify even if they have no federal tax liability, as long as they pay Social Security and Medicare payroll taxes.
Daschle also will propose additional tax breaks for businesses, including more generous depreciation designed to encourage companies to invest in new equipment. Additionally, the South Dakota Democrat intends to call for a tax credit to help small businesses pay for health insurance premiums and will propose a credit for businesses investing in broadband high speed internet equipment, Democratic sources said.
The aid to the states and local governments includes about $15 billion with no strings attached, as well as about $25 billion more to be divided among Medicaid, education, homeland security and highway and mass transit construction, sources said.
Daschle also intends to propose extending unemployment benefits to an estimated 1 million individuals who have already exhausted their benefits and remain out of work. Republicans rejected similar proposals in both the House and the Senate earlier this year when Congress approved legislation renewing a program that gives 13 weeks of benefits to workers who have depleted the 26 weeks of aid that comes from the states.