Ok so let me get this straight....
When Bush gave everyone a $300 tax rebate, which was in fact simply an 'advance' on the following year's tax refund, it was an 'irresponsible' idea that did not stimulate the economy and instead only worsened our budget crisis. Booo!
Now Democrats want to give another $300 tax rebate which has no correlation to a planned tax reduction and will indeed be deficit spending. Except this time its not 'irresponsible', it will help stimulate the economy!
I love politics! haha!
Democrats Seek a Tax Rebate to Aid Growth
--------------------------------------------------------------------------------
January 25, 2003
Democrats Seek a Tax Rebate to Aid Growth
By DAVID FIRESTONE
ASHINGTON, Jan. 24 ? Senate Democrats took on the administration's tax cut plan in earnest today with the release of a sharply different economic stimulus proposal, calling for a $300-a-person rebate check and $40 billion in aid to states and cities.
The one-year plan, announced in Cleveland by Senator Tom Daschle, the minority leader, would spend $141 billion to stimulate the economy, in contrast to the 10-year $674 billion plan proposed by President Bush. It would drop the administration's proposal to eliminate the dividend tax, an idea with diminishing support on Capitol Hill, and concentrate its tax relief at the lower-to-middle end of the economic spectrum, with few benefits for the wealthy.
Today's plan is likely to become the Democrats' most reliable political tool once the jockeying over tax cuts begins on Tuesday with Mr. Bush's State of the Union address, even though the party lacks the votes to pass it. Although some Democrats have slightly different ideas on how to stimulate the economy, the party appears to be more unified against Mr. Bush's economic ideas than it was in 2001, and its leadership has begun to take heart in the president's slippage in opinion polls, particularly on economic issues.
The Democratic leadership in the House and Senate is in agreement on the populist appeal of tax rebates and are intended to draw the sharpest possible contrast with the administration's emphasis on cutting taxes on stock dividend.
"Economists tell us that the wealthy are far less likely to spend a tax cut than middle-income families," Mr. Daschle, a South Dakota Democrat, said today in an address to the City Club of Cleveland. "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?"
Mr. Daschle said in an interview today that Democrats believed that they had to join the tax-cutting bandwagon to create jobs and energize a listless economy. After an election last year in which the party's ideas failed to draw widespread support, resisting any further tax cuts could have become a serious political problem for the Democrats. But Mr. Daschle said his proposed tax cuts would not increase the deficit nearly as much as would Mr. Bush's plan.
Beyond its political usefulness, Democratic leaders say, the plan includes several ideas that could form the basis of a compromise with Republicans in the Senate, the chamber that will become the playing field in the tax cut competition.
At the moment, Mr. Bush lacks the votes to pass his plan in the Senate, now that several moderate Republicans have sharply criticized the dividend tax cut and the resulting growth in the deficit. To win back those moderates and a few centrist Democrats, Republicans like Senator Charles E. Grassley of Iowa, chairman of the Senate Finance Committee, are already talking about cutting back on the Bush plan and paring the dividend tax cut.
Today Senator Max Baucus of Montana, the ranking Democrat on the finance panel, said he would consider a compromise with the Republicans if it contained several elements of the Democratic plan, in particular the aid to states, many of which are facing huge budget gaps.
Mr. Baucus said he was open to a compromise on cutting tax rates ? which the Daschle plan avoids ? but not at the highest levels. Last month, Mr. Baucus proposed dropping the income tax on the first $3,000 of taxable wage income, which is similar in effect to the rebate idea but would take longer to stimulate the economy. He also proposed $75 billion in aid to states.
"It's a very good start, and I don't disagree with anything in it," Mr. Baucus said of Mr. Daschle's proposals. "I think our goal here, however, is to get a broad-based bill and try to avoid a 51-vote partisan bill. So I want to work with Senator Grassley to come up with something that might get 60 votes or more, and to that end I'm open to talking about rate cuts, as long as the size of the package comes down."
Mr. Baucus's comments illustrate the continuing difficulty Mr. Daschle is likely to encounter in holding together his caucus. Democrats across Capitol Hill have spent the last month holding news conferences to announce various economic proposals, only some of which are in the overall plan released today. Earlier this week, Senators Jon Corzine of New Jersey and Mary L. Landrieu of Louisiana proposed a refund of Social Security and Medicare payroll taxes, and Senator Byron L. Dorgan of North Dakota proposed a rebate plan slightly different from Mr. Daschle's. Senator John B. Breaux of Louisiana, a centrist who is likely to be an influential swing vote on any tax plan, has not yet committed to any of the ideas, but aides said he wants a plan much smaller than the president's.
House Democrats, who will have less influence in the debate because of the more rigid Republican control of that chamber, issued a similar version of today's plan earlier this month. No Democrats have expressed support for the dividend tax cut, the largest component of the White House plan, and several Republicans have come out against it.
Ari Fleischer, the president's press secretary, ridiculed the multiplicity of Democratic voices today, saying it was impossible to tell which alternative would emerge as the party's plan. He also said the president was not interested in the tax rebate idea.
Mr. Grassley was only slightly less dismissive, saying he would consider the plan among many other proposals.
"Senator Daschle's announced plan appears very light on job creation, and very heavy on political theater," Mr. Grassley said.
Today's plan would extend unemployment insurance benefits to the one million workers whose benefits have run out but are still searching for a job. To encourage business investment, the plan would allow a 50 percent deduction for new equipment, an increase from the current 30 percent, and would permit small businesses to write off $75,000 in investments, up from $25,000. Small businesses would also get a 50 percent tax credit on the cost of employee health premiums.
Of the $40 billion in aid to states, $15 billion would be unrestricted, and the rest would be earmarked for domestic security, education, Medicaid and new public works. Mr. Daschle said the aid was intended to allay state tax increases that could undermine the effects of federal tax cuts.
Mr. Daschle said Democratic leaders chose the tax rebate method because of its immediate stimulus and because it was easier to understand and benefited far more people than the dividend tax cut. He also said it was more responsible than the president's "reckless" plan, and he predicted it would garner some Republican support.
Copyright 2003 The New York Times Company
When Bush gave everyone a $300 tax rebate, which was in fact simply an 'advance' on the following year's tax refund, it was an 'irresponsible' idea that did not stimulate the economy and instead only worsened our budget crisis. Booo!
Now Democrats want to give another $300 tax rebate which has no correlation to a planned tax reduction and will indeed be deficit spending. Except this time its not 'irresponsible', it will help stimulate the economy!
I love politics! haha!
Democrats Seek a Tax Rebate to Aid Growth
--------------------------------------------------------------------------------
January 25, 2003
Democrats Seek a Tax Rebate to Aid Growth
By DAVID FIRESTONE
ASHINGTON, Jan. 24 ? Senate Democrats took on the administration's tax cut plan in earnest today with the release of a sharply different economic stimulus proposal, calling for a $300-a-person rebate check and $40 billion in aid to states and cities.
The one-year plan, announced in Cleveland by Senator Tom Daschle, the minority leader, would spend $141 billion to stimulate the economy, in contrast to the 10-year $674 billion plan proposed by President Bush. It would drop the administration's proposal to eliminate the dividend tax, an idea with diminishing support on Capitol Hill, and concentrate its tax relief at the lower-to-middle end of the economic spectrum, with few benefits for the wealthy.
Today's plan is likely to become the Democrats' most reliable political tool once the jockeying over tax cuts begins on Tuesday with Mr. Bush's State of the Union address, even though the party lacks the votes to pass it. Although some Democrats have slightly different ideas on how to stimulate the economy, the party appears to be more unified against Mr. Bush's economic ideas than it was in 2001, and its leadership has begun to take heart in the president's slippage in opinion polls, particularly on economic issues.
The Democratic leadership in the House and Senate is in agreement on the populist appeal of tax rebates and are intended to draw the sharpest possible contrast with the administration's emphasis on cutting taxes on stock dividend.
"Economists tell us that the wealthy are far less likely to spend a tax cut than middle-income families," Mr. Daschle, a South Dakota Democrat, said today in an address to the City Club of Cleveland. "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?"
Mr. Daschle said in an interview today that Democrats believed that they had to join the tax-cutting bandwagon to create jobs and energize a listless economy. After an election last year in which the party's ideas failed to draw widespread support, resisting any further tax cuts could have become a serious political problem for the Democrats. But Mr. Daschle said his proposed tax cuts would not increase the deficit nearly as much as would Mr. Bush's plan.
Beyond its political usefulness, Democratic leaders say, the plan includes several ideas that could form the basis of a compromise with Republicans in the Senate, the chamber that will become the playing field in the tax cut competition.
At the moment, Mr. Bush lacks the votes to pass his plan in the Senate, now that several moderate Republicans have sharply criticized the dividend tax cut and the resulting growth in the deficit. To win back those moderates and a few centrist Democrats, Republicans like Senator Charles E. Grassley of Iowa, chairman of the Senate Finance Committee, are already talking about cutting back on the Bush plan and paring the dividend tax cut.
Today Senator Max Baucus of Montana, the ranking Democrat on the finance panel, said he would consider a compromise with the Republicans if it contained several elements of the Democratic plan, in particular the aid to states, many of which are facing huge budget gaps.
Mr. Baucus said he was open to a compromise on cutting tax rates ? which the Daschle plan avoids ? but not at the highest levels. Last month, Mr. Baucus proposed dropping the income tax on the first $3,000 of taxable wage income, which is similar in effect to the rebate idea but would take longer to stimulate the economy. He also proposed $75 billion in aid to states.
"It's a very good start, and I don't disagree with anything in it," Mr. Baucus said of Mr. Daschle's proposals. "I think our goal here, however, is to get a broad-based bill and try to avoid a 51-vote partisan bill. So I want to work with Senator Grassley to come up with something that might get 60 votes or more, and to that end I'm open to talking about rate cuts, as long as the size of the package comes down."
Mr. Baucus's comments illustrate the continuing difficulty Mr. Daschle is likely to encounter in holding together his caucus. Democrats across Capitol Hill have spent the last month holding news conferences to announce various economic proposals, only some of which are in the overall plan released today. Earlier this week, Senators Jon Corzine of New Jersey and Mary L. Landrieu of Louisiana proposed a refund of Social Security and Medicare payroll taxes, and Senator Byron L. Dorgan of North Dakota proposed a rebate plan slightly different from Mr. Daschle's. Senator John B. Breaux of Louisiana, a centrist who is likely to be an influential swing vote on any tax plan, has not yet committed to any of the ideas, but aides said he wants a plan much smaller than the president's.
House Democrats, who will have less influence in the debate because of the more rigid Republican control of that chamber, issued a similar version of today's plan earlier this month. No Democrats have expressed support for the dividend tax cut, the largest component of the White House plan, and several Republicans have come out against it.
Ari Fleischer, the president's press secretary, ridiculed the multiplicity of Democratic voices today, saying it was impossible to tell which alternative would emerge as the party's plan. He also said the president was not interested in the tax rebate idea.
Mr. Grassley was only slightly less dismissive, saying he would consider the plan among many other proposals.
"Senator Daschle's announced plan appears very light on job creation, and very heavy on political theater," Mr. Grassley said.
Today's plan would extend unemployment insurance benefits to the one million workers whose benefits have run out but are still searching for a job. To encourage business investment, the plan would allow a 50 percent deduction for new equipment, an increase from the current 30 percent, and would permit small businesses to write off $75,000 in investments, up from $25,000. Small businesses would also get a 50 percent tax credit on the cost of employee health premiums.
Of the $40 billion in aid to states, $15 billion would be unrestricted, and the rest would be earmarked for domestic security, education, Medicaid and new public works. Mr. Daschle said the aid was intended to allay state tax increases that could undermine the effects of federal tax cuts.
Mr. Daschle said Democratic leaders chose the tax rebate method because of its immediate stimulus and because it was easier to understand and benefited far more people than the dividend tax cut. He also said it was more responsible than the president's "reckless" plan, and he predicted it would garner some Republican support.
Copyright 2003 The New York Times Company
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