Skip to main content /POLITICS

Deal may be in works on stimulus bill

Daschle may back speeding up income tax cuts if the GOP increases unemployment spending, administration officials said.  

WASHINGTON (CNN) -- Bush administration officials expressed optimism late Wednesday that a deal could be struck soon on an economic stimulus bill following a one-on-one meeting between Treasury Secretary Paul O'Neill and Senate Majority Leader Tom Daschle.

Daschle, D-South Dakota, reportedly showed willingness to accelerate income tax rate cuts -- the critical element of Bush's economic stimulus proposal and a key gauge of the Democratic leader's seriousness, officials said.

"Nobody shook hands, but the secretary is optimistic we can put a bipartisan deal together," a senior Treasury Department official said.

An aide to Daschle said the meeting, which lasted about 30 minutes, discussed "what is important and what we can do to get a bill passed," with the Democratic leader reiterating his proposals for a broad worker package.

Daschle's chief spokeswoman, Anita Dunn, said the majority leader was "open" to talk on income tax rate cuts if the bill included increased spending for the unemployed.

Speaking on CNN's "Larry King Live," Senate Minority Leader Trent Lott, R-Mississippi, said he "believes there will be a deal" worked out Thursday.

Until Wednesday, Daschle and other top Democrats had ruled out accelerating income tax rate reductions in the 10-year Bush tax cut passed earlier this year.

In Wednesday's meeting, aides said Daschle told O'Neill that Democrats might vote to eliminate the corporate minimum tax for future years but could not support giving rebates to corporations for taxes paid since the minimum tax was instituted in 1986, as House Republicans advocate.

Daschle said Democrats might support an accelerated income tax rate reduction from 27 percent to 26 percent -- but not to 25 percent, as Republicans want, the aides said.

"These are difficult issues," Daschle said after the meeting. "Economics has always separated our parties philosophically, and to overcome the philosophical differences is something that we are going to try and do."

Earlier Wednesday, the top four congressional leaders and President Bush at the White House met to bridge the gaps in proposals offered by Republicans who control the House and Democrats who control the Senate.

According to aides briefed on the meeting, Daschle told the other leaders he might be able to get the 60 votes needed to get a compromise through the Senate if it includes money for unemployed workers.

Democrats have sought to extend by 13 weeks unemployment benefits for any workers who lost their jobs since March, when experts say the economy went into recession.

They also want funds to cover 75 percent of the health insurance premiums for unemployed workers who buy their insurance through the federally mandated COBRA program.

In return, Daschle said he thought Democrats would be willing to support the elimination of the corporate minimum tax and an accelerated reduction in the 27 percent income tax rate, which Congress agreed to do earlier this year.

-- CNN's Major Garrett, Ted Barrett, Dana Bash and Kate Snow contributed to this report.


• U.S. Senate
• U.S. Treasury Department
• The White House
• U.S. House of Representatives

Note: Pages will open in a new browser window
External sites are not endorsed by CNN Interactive.


Back to the top