An Uncertain Future

A clock hangs upside down inside the heavily damaged Lawless High School in the Lower Ninth Ward Tuesday, Aug. 28, 2007, in New Orleans.
President Bush journeyed to the Capitol on Wednesday to lobby for recession relief legislation, and House Republicans sweetened their bill with fresh billions for health care in a push for bipartisan backing on a late-night vote.

Democrats denounced the measure as a political gesture with no chance of becoming law.

"The only thing I can figure is they don't want a stimulus package," said Speaker Dennis Hastert, R-Ill., ..."It's very frustrating."

Republicans "refused to negotiate seriously" over health care for the unemployed, countered Senate Majority Leader Tom Daschle, D-S.D.

House Republicans set the stage for a late, long evening of debate after declaring that weeks of fitful bipartisan negotiations on economic stimulus legislation had reached a dead end.

Earlier Wednesday Mr. Bush said he believed the legislation had the votes to pass both chambers.

"This bill will pass the House. It's got enough votes to pass the Senate," he said.

The House bill approves 13 additional weeks of unemployment benefits for those laid off since the March onset of the recession, money for health insurance subsidies for the unemployed and rebates of up to $600 for lower-wage earners who did not qualify for this summer's checks.

In late afternoon, Republicans also disclosed they had added $4.6 billion to the measure for the states to spend on health care costs. GOP officials said the proposal was designed to satisfy governors fearful that the recession would overwhelm their state Medicaid budgets, and also to make the measure more attractive to Democrats in the House and Senate. Hastert and other leaders worked successfully to quell concerns raised by GOP conservatives, these officials said.

The bill also would cut the current 27 percent income tax rate to 25 percent effective Jan. 1, four years earlier than planned. Beginning in 2002, that rate applies to taxable income between $27,950 and $67,700 for individuals, and between $46,700 and $112,850 for married couples.

In addition, the bill would let businesses write off 30 percent annually of the cost of new investment for the next three years, and ease a corporate minimum tax that can boost corporations' tax bills even in unprofitable years.

House passage was assured, given the GOP majority, although no vote seemed likely until well after midnight. Democrats said they expected few defections on what shaped up as a largely party-line vote.

In the Democratic-controlled Senate, there appeared to be more than 50 votes for the measure. But the GOP was unable to count the 60 votes needed to force final approval over the opposition of Daschle and other members of his party.

In an unusual working visit to the Capitol, Mr. Bush met privately with moderate House Democrats as well as a bipartisan group of senators, three Democrats among them, who support the GOP measure. In brief remarks to reporters, Bush did not mention Daschle by name, but his reference was unmistakabl.

"I look forward to working with both bodies (House and Senate) in any way I can to convince those who are reluctant to get a bill done, that this makes sense for America," he said.

His spokesman, Ari Fleischer, was more direct. "The president would be delighted if Sen. Daschle were to sign on" to the deal with moderate Democrats, he said. "The president would be delighted if Sen. Daschle would let it come to a vote.... Why block progress?"

Daschle, D-S.D., attacked regularly by Republicans as an obstructionist, saw it differently.

"We have come more than half way in meeting our Republican colleagues on an array of tax questions that they have said were important to them.... But to date they have been unwilling to accept even a modicum of change, even some degree of limited help for these unemployed workers in both unemployment compensation as well as health care."

Daschle also said, "We regret very much that our Republican colleagues, at least so far, have refused to come to the table to negotiate seriously on health and unemployment benefits in spite of the fact that millions of people are unemployed today."

The main stumbling block during the bipartisan negotiations concerned health insurance benefits for the unemployed.

The House GOP bill provides laid-off workers with a tax credit equal to 60 percent of the cost of a health insurance policy, money they could use to purchase their own coverage if they wished.

Democrats want a direct 75 percent subsidy for job-related health insurance coverage that many workers are eligible to keep after losing their jobs. The money would go to the employer, rather than to the individual as Republicans want. For laid-off workers who did not have health insurance on the job, Democrats proposed expanded coverage under Medicaid, the federal-state program that provides health care for the poor.

The House bill was crafted to incorporate many concessions that Republicans have made in several weeks of bargaining with the Democrats, since the GOP muscled through legislation on a party-line vote several weeks ago.

That bill did not include the additional 13 weeks of unemployment benefits, and had a repeal of the alternative minimum tax that would have given billions of dollars to large corporations, Enron and IBM among them.

Democrats opposed it overwhelmingly, and quickly launched radio commercials against three GOP lawmakers who voted for it.

Daschle cited concessions Democrats made in the discussions, saying he had agreed to GOP proposals for business tax relief, and he had been willing to "look at rates," the GOP proposals for accelerated tax cuts.