Bush calls on Congress to pass $140 billion stimulus package
Democratic congressional leaders hope to have a final deal by Jan. 28.
In a bid to avert a steep downturn, President Bush called on Congress to pass an economic growth plan that's big enough to make a difference – and to do it quickly.
"This growth package must be temporary and take effect right away – so we can get help to our economy when it needs it most," Mr. Bush said in remarks from the White House on Friday.
Without laying out details of ongoing negotiations on Capitol Hill, the president said the growth plan should include broad-based tax relief for American businesses and taxpayers and be about 1 percent of US gross domestic product.
Sharp drops in key economic indicators are changing the dynamic in Washington from gridlock to consensus, at least on a plan to revive the economy.
The No. 1 priority in ongoing bipartisan negotiations is speed, say congressional aides on both sides of the aisle. Issues likely to slow down a deal are being sidelined in the interest of consensus.
In all, the package should come in between $140 billion and $150 billion, said Treasury Secretary Henry Paulson, in a briefing after the president's remarks. He declined to confirm comments by congressional aides that the White House is proposing rebates for taxpayers in the $800 to $1,600 range. (That compares with rebates of $300 and $800 in the president's 2001 stimulus plan.)
"We want to be open, collaborative, and not have too much specificity as we work with Congress to work out the details," Secretary Paulson said.
On Capitol Hill, Republican and Democratic leaders said that they welcomed the president's willingness to work with Congress on a stimulus plan. "The President has outlined his principles, as have Democrats and Republicans in Congress. Now we will work together on the details of a stimulus package," said Speaker Nancy Pelosi.
In the run-up to the president's remarks, Senate majority leader Harry Reid had complained in a written statement that Bush was preempting bipartisan negotiations by "unilaterally detailing his own approach without congressional input."
The flap was quickly resolved.
Senator Reid "appreciates the fact that the president didn't get into a lot of detail. The last thing we can afford right now is people staking out positions and getting back into their respective corners. We need to do something as quickly as possible," said Jim Manley, a spokesman for Reid.
As negotiations continue, both ends of Pennsylvania Avenue are sweeping aside what could be obstacles to an emerging consensus. The president confirmed on Friday that he will not push to include in the stimulus plan a permanent extension of income- and other tax cuts, set to expire in 2010.
"Passing a new growth package is our most pressing economic priority," he said. "When that is done, Congress must turn to the most important economic priority for our country, and that's making sure the tax relief that is now in place is not taken away."
Meanwhile, Democrats say they will not push for infrastructure or social-spending programs that could derail a stimulus plan.
"There's a real attitude of cooperation between the parties and at each end of Pennsylvania Avenue right now, and I think that's because people realize the precarious state of our economy right now," said Sen. Charles Schumer (D) of New York, who chairs the Joint Economic Committee.
"Middle-class families should get the lion's share of the rebates and they will spend them," he said in a phone briefing after the president's remarks. But he said that Democrats are not rejecting the president's call to also include tax cuts for business, including small business.
"We don't rule that off the table at all, but it has to be focused and targeted so it gets money back into the economy quickly," Senator Schumer added.
As Washington's vast lobbyist community gears up to slip new tax breaks or incentives into the plan, Bush administration officials are urging Congress to keep the plan simple.
"We believe there is a great benefit to being simple," said Paulson, who is leading negotiations for the White House on Capitol Hill. "The Christmas season has come and gone. We're not trying to decorate a Christmas tree here. If we can stay broad-based and simple, we'll be able to be quicker and be able to have a bigger impact on the economy sooner."
The White House's principles for negotiation, released Friday, urge building a stimulus package on tax relief for American businesses and individuals, rather than new federal spending "that would have little impact on the economy." The plan should be temporary, take effect immediately, and not include any tax increases.
"If we can work together to keep partisanship from infecting this process, we can quickly have a significant accomplishment to start the year – and a template for making law, not just making a point."
Speaker Pelosi says that she expects agreement on the principles of a plan by Tuesday, when congressional leaders meet with the president in the White House.
Congressional leadership aides say that a final deal is likely by the president's State of the Union address on Jan. 28.