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Stimulus plan builds bipartisan steam

Congress and White House are joining to speed the $150-billion package to fight the economic downturn.

January 23, 2008|Maura Reynolds | Times Staff Writer

WASHINGTON — Spooked by stumbling stock markets around the world, Bush administration officials and members of Congress accelerated the pace of negotiations over a $150-billion economic rescue bill Tuesday, saying they intended to pass it before Feb. 15.

That could put rebate checks into the hands of taxpayers by late spring.

"The attitude that we ought to get something done soon prevails on both sides," said the Senate's No. 1 Republican, Minority Leader Mitch McConnell of Kentucky. "Our definition of 'soon,' obviously, is in the next few weeks. That, by the standards in Congress, is pretty fast."

The goal is to pass the legislation, a mix of tax rebates and other measures aimed at jolting the economy with an infusion of consumer spending and business investment, before Congress adjourns for the Presidents Day break.

Negotiators wouldn't discuss details of the plan but expressed confidence that for the first time since Democrats took control of Congress a year ago, the two parties and the two branches of government would be able to come together on a compromise to limit the damage of an economic downturn.

"All of us understand that we need to work together. All of us understand that we need to do something that will be effective. And all of us understand that now is the time to work together to get a package done," President Bush said after meeting with congressional leaders at the White House.

White House officials said the president hadn't rejected out of hand the idea of making the stimulus package larger than the $150 billion that has recently been discussed. Bush said last week that the package should equal about 1% of gross domestic product, estimated at $14 trillion to $15 trillion last year.

"The details will be negotiated," White House spokeswoman Dana Perino said. Bush "remains open," she added, "and he is not going to close out any doors."

Hill leaders said they wanted to fast-track the legislation by having House Speaker Nancy Pelosi (D-San Francisco) and Minority Leader John A. Boehner (R-Ohio) negotiate the provisions personally with Treasury Secretary Henry M. Paulson Jr., who would take the lead for the Bush administration.

And Pelosi is expected to seek the agreement of committee chairmen to move the bill directly to the House floor without going through the usual round of committee meetings and votes.

On the Senate side, leaders are banking on momentum from the bill's probable success in the House to help speed it through the closely divided chamber, where passage is expected to be more difficult.

Despite the chorus of accord at the leadership level, occasional notes of discord were sounded within the ranks. In a speech on the Senate floor, Sen. Judd Gregg of New Hampshire, the top Republican on the budget committee, expressed doubt that the tax rebates would stimulate the economy as much as Democrats had promised.

"The money will be spent, but does it stimulate our economy?" Gregg said.

"So much of our product today that we consume in America today is produced outside the United States -- maybe it stimulates the Chinese economy."

He added that the cost of the stimulus would be added to the national debt, in effect passing on that sum plus interest to the next generation.

"That money is borrowed from our children," Gregg said. "And then our children and our children's children have to pay it back. So, do you get the value? Is there a value there large enough to justify putting this debt on our children's back?"

Sen. Edward M. Kennedy (D-Mass.), chairman of the labor committee, contended that the kinds of tax incentives for business investment favored by Republicans "do not provide an effective stimulus."

"The problem with our economy today is a lack of demand, not lack of capacity," Kennedy said in a floor speech. "Businesses will not produce more until they know that customers are ready to buy. Personal tax cuts targeting middle- and low-income families and funding boosts for programs like unemployment insurance and food stamps are a better stimulus than business tax cuts because they encourage consumers to start spending."

On Tuesday, Bush announced the formation of an advisory committee to come up with ideas for educating Americans about their finances.

The committee, chaired by financier Charles Schwab, is to suggest ways to improve "financial literacy."

"I just wonder how many people, when they bought a sub-prime mortgage, knew what they were getting into," Bush said at a White House ceremony, referring to the shaky mortgages whose high default rates have sparked the meltdown in the home-loan markets and on Wall Street.

"We want people to own assets. We want people to be able to manage their assets," the president continued. "We want people to understand basic financial concepts, and how credit cards work and how credit scores affect you, how you can benefit from a savings account or a bank account. That's what we want."


Times staff writer Richard Simon contributed to this report.

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