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Bush tries to break stimulus deadlock

WASHINGTON (CNN) -- President Bush met Tuesday evening with a group of bipartisan Senate moderates in an effort to reach a compromise on a stalled economic stimulus package -- a session White House aides said made headway in breaking what they termed a "logjam."

The meeting capped a whirlwind of activity that began with Bush sending his treasury secretary to Capitol Hill with a compromise package that made several major concessions to Democratic concerns.

The plan makes several major concessions to Democratic concerns, though lawmakers said they were no guarantee the package would pass more quickly as a result.

Senate Majority Leader Tom Daschle, who Republicans have called an "obstructionist" in the stimulus debate, said he would accept the House GOP plan -- with some caveats.

"My message to the White House is take the new Republican proposal offered by Republican House leadership," he said. "If they want an agreement, we have the makings of an agreement right here."

The president's compromise plan parallels a proposal made last month by Sen. John Breaux, D-Louisiana, and Sen. Olympia Snowe, R-Maine.

Bush indicated he would be willing to negotiate further Wednesday morning when he has a breakfast meeting with congressional leaders, Breaux said after meeting with the president Tuesday evening.

"I would hope that when the president meets with the leadership tomorrow, they would look upon this document as the basis for an agreement and one that I think will be the ultimate economic stimulus package that the president will be able to sign," he said.

Key proposals in the Bush compromise include:

-- Unemployment benefits: Bush had proposed that expanded unemployment benefits be made available only to workers in areas directly affected by the September 11 strikes. He will now accept a nationwide expanded benefits package retroactive to March, which the government says is when the recession began.

-- Health care benefits: Bush is now open to expanding emergency health care benefits on a national basis beyond the emergency grants he had initially proposed.

-- Individual tax cuts: The administration had proposed accelerating the next round of across-the-board tax cuts in the already enacted Bush tax plan. Instead, the compromise calls for rebates to low-income workers who did not receive rebates from the first round of tax cuts because they did not pay federal income taxes. It also calls for accelerating the next round of tax cuts for those in the 25 percent bracket.

-- Business depreciation: The plan maintains new business expensing provisions designed to encourage business to purchase new equipment. There is general bipartisan agreement on this point.

-- Alternative minimum tax: Bush had called for a repeal of the corporate alternative minimum tax, and the House-passed plan includes such a provision. The new Bush compromise proposal calls for reductions in the AMT, but not an outright repeal.

"This removes all the obstacles and excuses for inaction," one senior administration official involved in the negotiations said. "It is designed to jump-start things and get this done."


Daschle said Senate Democrats would agree to the House GOP plan, which is reported to include a $20 billion unemployment benefits package, accelerated depreciation for businesses, and rebate checks for low income workers.

But Daschle said Democrats would want to replace a Republican proposal to accelerate rate reductions with another GOP proposal for a month-long payroll tax holiday.

"It seems to me a no-brainer, that is, you have a Republican proposal that Democrats like and a Republican proposal that Democrats don't like, you'll take the Republican proposal the Democrats like and make a deal out of it," said Daschle.

But accelerating the some of the GOP tax cuts enacted in the spring has been a non-negotiable provision in any stimulus bill for Republicans.

House Majority Leader Dick Armey, R-Texas, called Daschle's offer "meaningless," while Sen. Trent Lott, R-Mississippi, said Daschle's move was a positive step.

"Senator Daschle seems to be making some offers now that are positive in terms of stimulus -- an indication that he is going to be serious this week about seeing if we can make some progress and come to an agreement," Lott said.

-- CNN's John King, Dana Bash and Kate Snow contributed to this report.


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