Dems Pitch Their Own Tax Cuts

Senate Democratic Leader Tom Daschle called Friday for $300-per-person income tax cuts and billions in aid to cash-strapped states as part of an economic stimulus package designed as an alternative to President Bush's recommendations.

Daschle's proposals also include tax breaks to help small businesses afford health insurance premiums and aid for an estimated 1 million jobless people who have exhausted their unemployment benefits.

Daschle, D-S.D., announced his proposals in a speech before the City Club of Cleveland. While they stand virtually no chance of enactment in the Republican-controlled Senate, they give Democrats an alternative to support during the coming debate over the president's recommendations.

"We need an economic plan with a single overriding goal of helping the economy, and helping the economy now," he said in the speech. "The president's plan is not economic stimulus. More than 90 percent of the tax cuts wouldn't get to the taxpayers until after 2003."

The measures proposed by Daschle would expire after one year and carry a price tag of roughly $140 billion, far less than the $674 billion, 10-year plan that Bush has issued.

Mr. Bush's plan proposed the elimination of the tax on dividends, and called for the acceleration of some of the income tax cuts that Congress approved two years ago — two elements that Daschle and other Democrats have criticized and that Daschle omitted from his own plan.

"If we're looking at a short-term economic goal, if we want to get the biggest bang for the buck in the shortest period of time, the dividend tax cut is not it," Daschle said.

Daschle's speech was part of a broader Democratic attempt to counter the administration's economic proposals. The party's leader in the House, Rep. Nancy Pelosi of California, proposed an alternative earlier this month, and she and Daschle plan a joint appearance on Monday that their offices described as a "pre-buttal to President Bush's State of the Union Address."

Additionally, Sen. Max Baucus, D-Mont., the senior Democrat on the Senate Finance Committee, released a plan a month ago that blends tax cuts for individuals with aid to the states and costs slightly more than Daschle's recommendations.

Daschle has been particularly critical of the president's tax proposals, describing them as a plan to "leave no millionaire behind."

Daschle proposed a tax cut of $300 per adult and an additional $300 per child, up to two children per family. Adults would qualify even if they have no federal tax liability, as long as they pay Social Security and Medicare payroll taxes.

Daschle also proposed additional tax breaks for businesses, including more generous depreciation designed to encourage companies to invest in new equipment. He also called for a tax credit to help small businesses pay for health insurance premiums and proposed a credit for businesses investing in broadband high-speed Internet equipment.

The aid to the states and local governments includes about $15 billion with no strings attached, as well as about $25 billion more to be divided among Medicaid, education, homeland security and highway and mass transit construction.

Daschle also proposed extending unemployment benefits to an estimated 1 million people who have exhausted benefits and remain out of work. Republicans rejected similar proposals earlier this year when Congress approved legislation renewing a program that gives 13 weeks of benefits to workers who have depleted the 26 weeks of aid that comes from the states.

A CBS News/New York Times poll released Thursday, meanwhile, suggests tax cuts may not be all that important to the American people.

While the economy and jobs remain the country's primary concerns, the poll showed there was little public support for tax cuts, either as a vehicle for stimulating the economy or for their own wallets. By 56 percent to 36 percent, a majority thinks that lowering the budget deficit would be a better way to improve the national economy than enacting a tax cut.

Sixty-five percent said the 2001 Bush tax cut did not help them significantly.

The nationwide poll of 997 adults, interviewed by telephone January 19-22, 2003, has a margin of error of plus or minus three percentage points.