US seeks economic stimulus bill

Lawmakers negotiate with Treasury secretary to come up with quick plan.

stimulus88 224 (photo credit: AP)
stimulus88 224
(photo credit: AP)
WASHINGTON (AP) - Top House leaders and Treasury Secretary Henry Paulson Wednesday tallied the cost of measures to jolt the US economy out of its slump as the three sought a swift bipartisan deal on a recovery package that could move through Congress within weeks. The leader of the House of Representatives, Speaker Nancy Pelosi, a Democrat, and Minority Leader John Boehner, a Republican, are taking the lead in congressional negotiations, with the centerpiece of the measure expected to be a tax rebate similar to, but bigger than, the $300-$600 checks sent out in the summer of 2001. The two huddled for a lengthy meeting with Paulson, President George W. Bush's point man on the package. Senior lawmakers in both parties met Tuesday with Bush, who has proposed a stimulus plan worth about $150 billion. Combined with Iraq war costs and decreasing corporate tax revenues because of the economic slump, a package that size would more than double last year's deficit spending of $163b., according to new congressional budget estimates. Pelosi, Boehner and Paulson are working on hammering out details. Senate leaders Harry Reid, a Democrat, and Mitch McConnell, a Republican, have agreed to stand back and let the House take the lead in the talks with the administration. In the Senate, Reid said in an interview, "There are too many cooks in the kitchen. Send something over to us and we'll try to move it as quickly as we can." Perhaps the most important obstacle to overcome is differences of opinion over who should receive rebate checks. Democrats want to deliver help to low-income workers who may not pay income taxes because they make too little or benefit from tax credits such as the child tax credit. Thus far, talks have focused on setting the parameters of a bill combining rebates with Republican-sought tax breaks for businesses, as well as Democratic-backed help for the unemployed and those on food stamps. Talks continued as the nonpartisan Congressional Budget Office, citing the weakening economy, estimated that the budget deficit for the current year will jump to about $250b. That figure does not reflect at least $100b. in likely additional red ink from the deficit-financed economic stimulus measure. Both sides have seemed to negotiate in good faith. Republicans and Bush declined to insist on4 extending Bush's 2001 and 2003 tax cuts that expire in three years, while Democrats offered up tax breaks for business and limited their roster of spending proposals. Democrats also agreed to waive budget rules requiring tax increases to finance the measure.