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Democrats Enter Tax Break Battle

Before Bush details his plan today, a competing stimulus package sets a combative tone.

The Nation

January 07, 2003|Janet Hook, Times Staff Writer

WASHINGTON — WASHINGTON -- The White House soon will be trolling for Democratic support for the sweeping $600-billion economic stimulus initiative President Bush details today, but building a bipartisan coalition likely will be harder than two years ago when dozens of Democrats backed Bush's initial tax cut plan.

House Democratic leaders, chastened by criticism that they have been too tepid in opposing past Bush initiatives, Monday outlined an alternative stimulus package that would be less expensive and more targeted to the middle class.


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The plan has little chance of becoming law, given that the GOP controls both the House and Senate. But its unveiling signals determination among Democrats to take a more combative stand against a White House plan they see as a sop to the rich and an overpriced drain on the government's deficit-ridden budget.

Democrats are particularly vociferous in their opposition to the centerpiece of Bush's plan, the elimination of taxes on dividend income -- a measure critics say would not give a quick lift to the economy.

"We stimulate the job market; the president stimulates the stock market," said Rep. Robert Menendez (D-N.J.) as Democratic leaders discussed their $136-billion alternative. It includes tax rebates, extended unemployment insurance and aid to financially strapped states.

Bush's ability to reach across the aisle for votes for his new plan has been hampered by changes in the political and economic environment in the last two years. With budget surpluses giving way to deficits and possible war with Iraq looming, even moderate Democrats who have supported Bush's economic policies in the past are cool to his latest tax relief agenda.

"A $600-billion package is a nonstarter," said Dianne Feinstein of California, one of 12 Democratic senators who supported the $1.35-trillion, 10-year tax cut that became law in 2001.

In a clear sign of the changed times, Feinstein later this week will introduce legislation to roll back a part of the 2001 law -- cuts in income tax rates for the wealthiest.

Rep. Calvin M. Dooley of Visalia, one of 28 House Democrats who backed Bush's 2001 tax cut, said Monday, "It certainly would be very difficult for me to vote for" the new plan. He added: "I think it is going to be difficult to find common ground."

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