Congress Heats Up Stimulus Effort, but With Exit Plans

With Congress close to finishing for the year, Republicans and Democrats are intensifying efforts to craft a bill meant to kick-start the economy with tax cuts and unemployment aid.

But they also are preparing political exit strategies in case those talks collapse.

Senior lawmakers from both parties continued closed-door discussions Friday in search of a compromise economic stimulus bill.

Substantive progress remained elusive, but it was seen at least as a positive sign that the negotiators were tamping down partisan rhetoric and planned to proceed this weekend.

A week ago, by contrast, talks had broken off, negotiators had left town and both parties were pointing fingers.

The resolution of the stimulus issue--whether to pass a bill and, if so, with what provisions--is one of the final questions facing the 107th Congress at the end of its first session.

Another unresolved issue involves defense spending. The Democratic-led Senate wants to trim President Bush’s Pentagon budget request to free up billions of dollars for domestic security programs, while the GOP-led House supports the administration. The Senate is also tied up over a controversial bill containing federal subsidies for farmers.

But other issues are rapidly falling away, and some House leaders are predicting final votes of the year by Thursday.

The Senate is set to send an education reform bill to the president Tuesday. Ten of 13 must-pass spending bills for the fiscal year that began Oct. 1 are completed.

In a move that could put pressure on the stimulus negotiations, House Majority Leader Dick Armey (R-Texas) said the House plans to take up the issue Tuesday. He did not say whether that bill would be drafted by the GOP or be the product of a bipartisan compromise.

In October, the House passed an earlier Republican stimulus bill calling for about $100 billion in tax breaks for businesses and individuals. Senate Democrats countered in November with a $73-billion plan with fewer business tax cuts and more aid to the unemployed and spending on other government programs. Senate Republicans prevented that bill from coming to a vote.

In the ensuing weeks, the matter has taken on heightened political significance, with the economy officially declared in recession. Tense, sporadic talks between the two parties have yielded halting steps toward compromise.

House GOP leaders have offered to fund at least $20 billion in aid for the unemployed, including tax credits for individuals and grants for states to fund health insurance. Bush has offered to scale back his proposals for corporate tax breaks and beef up funding for unemployment benefits and health care coverage.

Senate Democrats, meanwhile, have dropped their insistence on extra appropriations. And some Democrats have signaled a willingness to consider a marginal rate cut targeted at middle-class taxpayers.

Whether all this movement will result in final congressional action remains uncertain.

John Feehery, spokesman for House Speaker J. Dennis Hastert (R-Ill.), said Friday that passing a stimulus bill has moved from the “can-do” list to the “must-do” list. “It’s one of the issues people care about. It’s a top priority for the Republicans, and it should be a top bipartisan priority.”

Asserting that the president is actively engaged, White House Press Secretary Ari Fleischer said Bush has been talking with Sen. John B. Breaux of Louisiana and other centrist Democrats in an effort to bridge the gap between the House and the Senate.

“There is time in the Congress to get it done,” Fleischer said, “and the president is putting his shoulder to the wheel and working the Congress to help make that happen.”

But Republicans also were prepared to lay blame at the doorstep of the Senate Democratic leadership in the event the talks fall apart. Fleischer said that “the votes are there” for a stimulus package supported by Bush, adding, “The only question is, will the Senate act?”

For his part, Senate Majority Leader Tom Daschle (D-S.D.) said Democrats would insist on provisions to help unemployed workers as much as possible with health care coverage.

And Daschle dismissed the possible move by House Republicans to force a vote on a stimulus bill Tuesday even if the two parties fail to reach agreement.

“That would be very counterproductive,” Daschle said. “That would not help. We would not get anything done that way. It would be nothing more than a political ploy.”

Daschle said he would “keep working, keep trying” to get a stimulus bill passed.

But when Daschle was asked if he would keep the Senate in session indefinitely to ensure action, the majority leader told reporters: “Well, I don’t know if I’ll go that far.”