Bush And Dem Leaders Inch Closer To Econ Deal

By Martin Kady II

(The Politico)  Democrats, congressional Republicans and President Bush are inching closer to a deal on an economic stimulus package, but there are still a few key details to be worked out before taxpayers can start looking for a check in the mail from Uncle Sam.

Bush and key congressional leaders held a conference call this afternoon to discuss a package, and aides familiar with the negotiations say the parties are in general agreement on a tax rebate, some social welfare spending like unemployment insurance and potentially some minor small-business tax breaks such as accelerated depreciation.

But the details are still in flux. Republicans are pushing for every taxpayer to get a rebate, while some Democrats would like a cap on income so the rebates are tilted toward the middle class, according to Hill aides. Democrats are pushing for aid to states, especially gaps in Medicaid costs, but Republicans are resisting that proposal, according to a GOP aide.

Democrats have decided to push aside their "pay as you go" rules for now, while Republicans are holding their fire on trying to make Bush's 2001 tax cuts permanent.

President Bush plans to announce a set of economic stimulus principles tomorrow but won't get into specific details. On Thursday morning, House Republican and Democratic leadership staff engaged in direct negotiations for the first time on a stimulus package.

Pelosi, who has gone to unusual lengths early in this 2008 session to push bipartisan talks on the economy, said she was optimistic after talking to Bush in the conference call today.

"There is reason to be hopeful," she said. "The first step was that the president had to admit there was a problem, and he did that in this call."

Patrick O'Connor contributed to this report.