Gephardt Offers Economic Stimulus Package

WASHINGTON -- House Minority Leader Richard A. Gephardt called Tuesday for $200 billion in new federal spending and tax cuts to rev up the economy, and the White House offered a strikingly encouraging response to his proposed tax relief.

Laying out an alternative economic agenda if his party retakes the House in the closely fought Nov. 5 elections, the Missouri Democrat said the lackluster economy needs an immediate boost of $125 billion in spending and $75 billion in tax cuts and rebates for working-class families and businesses.

Gephardt, in his speech here, also pushed for familiar Democratic priorities: a raise in the minimum wage to $6.65 an hour from the current $5.15; an extension of unemployment benefits; a new system to protect worker pensions; a crackdown on excessive compensation for corporate chief executives; cuts in federal subsidies for corporations and a “budget summit” to help erase a long-term federal deficit.

Peppering his words with strong criticism of the Bush administration, Gephardt declared: “The fact is America faces a clear and present danger to the economic life of working families. But all the president and the Republican House have offered is an extremist ideology of trickle-down economics and ineffective gimmicks.”

In large part, the speech was the latest Democratic effort to focus the attention of voters on the economy before the midterm elections, after weeks of debate about Iraq and other national security concerns.

And normally, an economic manifesto from a top Democrat three weeks before the congressional elections would draw nothing but scorn from top Republicans.

Indeed, House Majority Whip Tom DeLay (R-Texas) dismissed Gephardt’s initiative as “nothing more than the discredited Democrat tax-and-spend scheme concealed behind a fresh Beverly Hills face lift.”

But White House Press Secretary Ari Fleischer’s response was far more receptive. President Bush’s spokesman shrugged off Gephardt’s partisan rhetoric and focused instead on an area of potential agreement. “The idea of tax incentives to help stimulate growth is always an interesting idea,” Fleischer said.

“Not to say the president is willing to embrace everything Congressman Gephardt said. But he gave an interesting speech.”

In the speech, delivered at the Economic Policy Institute, a liberal think tank, Gephardt proposed spending $25 billion on school construction, $25 billion on new protections against terrorism and $75 billion on health-care programs for the needy.

He also opened the door to new tax cuts -- an idea that could gain steam when the new Congress convenes in January. His plan calls for $75 billion in tax rebates or credits “for working families” -- he was not more specific -- and business investment incentives.

Gephardt, as he has before, also criticized the 10-year, $1.35-trillion tax cut enacted last year at Bush’s urging.

He noted that the federal budget has plunged back into deficit under the president’s watch.

Like most other leading Democrats, he was silent on whether provisions of the tax law should be rolled back or frozen.

However, in a fresh wrinkle, he said Congress should consider imposing budget “triggers” or “caps,” mechanisms that could be used to reduce spending or trim elements of the Bush tax cut.

Gephardt is leading the Democratic effort to overcome a 223-208 Republican majority and end eight years of GOP rule in the House. (Three seats in the 435-member chamber formerly held by Democrats are vacant, one is held by a Democrat-leaning independent.)

He also is eyeing a possible run for president in 2004 against Bush.

Also Tuesday, Senate Majority Leader Tom Daschle (D-S.D.) delivered an economic speech harshly critical of the Bush administration. Daschle, fighting to keep or expand his party’s one-seat Senate edge, said the president and his advisors have glossed over danger signs such as a falling stock market and rising unemployment.

“I don’t know where these guys are living, but it must be somewhere within the neighborhood of oblivious,” Daschle said on the Senate floor. “When it comes to America’s economic problems, this administration is woefully out of touch.”

Republicans reply that the Senate, under Daschle’s leadership since June 2001, has failed to act on a raft of measures that would help the economy.

“The Senate needs to do something,” said Senate Minority Leader Trent Lott (R-Miss.). “And we, right now, are just not producing.”