Daschle Offers Own Economic Package in Attack on Bush Plan

Times Staff Writer

Four days before the State of the Union address, the Senate's top Democrat on Friday mounted a fresh attack on President Bush's tax cut plan and offered an alternative he said would give the sluggish economy a quick boost.

Senate Minority Leader Tom Daschle (D-S.D.) proposed giving working families tax rebates of up to $1,200, extending benefits to the unemployed, giving businesses new tax breaks and pumping $40 billion into financially distressed cities and states.

With Republicans controlling Congress, Daschle's $112-billion proposal was essentially a manifesto of opposition that has almost no chance of becoming law.

But Daschle staked out a negotiating position for his party as the Senate readies for a free-wheeling debate likely to substantially alter Bush's $674-billion proposal to abolish taxes on stock dividends, accelerate to 2003 income tax cuts scheduled for later in the decade and take other measures meant to bolster the economy.

Influential Senate centrists -- Republicans and Democrats -- have been lukewarm and, in some cases, critical of the Bush plan and are seeking to rewrite large portions of it.

Daschle, in a speech to the City Club of Cleveland, sought to stoke rebellion with a tax cut proposal he said was aimed at average Americans instead of the wealthiest.

As he has since Bush unveiled his plan this month, Daschle belittled the proposal to eliminate the tax on dividends as a giveaway to the rich.

"Economists tell us that the wealthy are far less likely to spend a tax cut than middle-income families," Daschle said. "In an atmosphere of economic weakness and tight budgets, should we be giving scarce dollars to the people who can afford to put them under the mattress?"

In response, Assistant White House Press Secretary Claire Buchan said: "The president has put forward a plan that he believes is right for America's economy and right for America's workers, based on its ability to help the economy grow and produce jobs."

Among other elements in the Bush plan, Buchan pointed to an immediate $400-per-child tax credit and lower tax rates that she said would permanently bolster the income of many families.

Daschle's proposal would be in effect for only one year. It would give all adult workers and their spouses a $300 tax rebate, plus $300 per child for up to two children. That would provide a $1,200 check to a family of four.

Also, states and cities would get $40 billion for homeland security, education, health care and other expenses. Businesses would be eligible for tax breaks meant to spur investment.

The White House sought to isolate Daschle's plan from the views of other Democrats.

"I think it's impossible to tell what Democrat alternative or alternatives will emerge because there are so many of them," White House Press Secretary Ari Fleischer said. "There's a lot of divisions from the Democrats."

But congressional Democrats seem more unified on taxes than two years ago, when 12 Democratic senators and 28 Democrats in the House broke ranks to help pass Bush's $1.35-trillion, 10-year tax cut.

So far, Sen. Zell Miller of Georgia is the only Democrat who has said he would support the Bush tax plan as proposed.

The Daschle plan closely resembles a $100-billion initiative offered by top House Democrats. On Friday, Sens. Max Baucus of Montana and John B. Breaux of Louisiana, senior Democrats on the tax-writing Finance Committee, praised Daschle's plan.

Baucus called the proposal "a great start." He singled out for praise the proposed aid to states. "It does not do the American taxpayer a bit of good to cut federal taxes if the states are forced to raise taxes or cut education funding," he said.

Baucus and Breaux, who voted for the tax cut in 2001, are considered pivotal negotiators on the issue.

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