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Stimulus still stalled, but leaders express optimism

WASHINGTON (CNN) -- Congressional leaders expressed guarded optimism Sunday that they can still agree on an economic stimulus package this week before leaving for Christmas.

Appearing on Sunday talk shows, Democrats and Republicans engaged in partisan tussling over corporate tax cuts, with each side accusing the other of slowing legislation that President Bush has requested.

"The Republicans have already given not only a little bit more but a whole lot more to the Democrats on their priorities, which we think are the wrong priorities," said House Majority Leader Dick Armey, R-Texas, on NBC's "Meet The Press." "I've been at the table now for two weeks. I haven't seen one item where the Democrats have said, 'Yes, we will now accept some of your priorities.'"

Senate Majority Leader Tom Daschle, D-South Dakota, accused by GOP leaders of standing in the way of a stimulus bill, responded, "[Republicans] want you to believe that [Democrats are the problem], but I have yet to see where the evidence is. "

"We haven't seen any movement on the Republican part on any of the benefit proposals that we've had on the table," Daschle said on CNN's "Late Edition." "We've given on just about every one of the issues, but there's been no give back."

The chief sticking point between Republicans and Democrats is a package of corporate tax cuts the GOP endorses as a stimulus for job growth. Democrats favor more direct spending, including providing extended unemployment benefits and health insurance to people laid off in the wake of the September 11 terrorist attacks.

Bush has proposed extending unemployment benefits and giving money to states to help with health insurance for laid-off workers, but he is also pushing for tax cuts. Those proposals include the repeal of the alternative minimum tax for corporations and speeding up the effective date of individual tax cuts already passed by Congress earlier this year.

Proposed repeal a sticking point

Daschle, who estimated the chances of passing stimulus bill "at least 50-50," said Democrats "will do everything we possibly can to pass a good one, but we're not going to pass a bad one."

"We can't tolerate bad policy. We don't want to run up more debt. We don't want to tap into Social Security and Medicare in ways we shouldn't be," he said. "I think it has to be a compromise both Republicans and Democrats can feel good about. "

Asked to assess the changes of a stimulus bill passing this week, Armey said, "I think the odds are good. I'm not sure I can ascribe a number to it."

"I think everybody's got to ask themselves the question, 'Can I, in good conscience, now fail to complete ... the final details on this deal?'" he said.

In the economic stimulus package passed by the GOP-controlled House, the alternative minimum tax would be repealed retroactively, back to its 1986 inception. That has drawn howls from Democrats, who say it would siphon off billions of tax dollars to big corporations. "Their idea is to give $25 billion to corporations for an alternative minimum tax they paid over the last 15 years, " House Minority Leader Richard Gephardt, D-Missouri, said in a joint "Meet the Press" appearance with Armey. "They would cut a check for $1 billion for Ford, $1 billion for IBM, all for doing nothing."

White House Budget Director Mitch Daniels said on CNN's "Late Edition" Sunday that the repeal, which was not in the original Bush proposal, it likely would have to be removed in order to reach a compromise.

"My guess is that it's not realistic to expect it to be there at the end," he chief said.

Armey defended the retroactive repeal, noting that it would apply to 23,000 businesses across the country, not just major corporations, and would stimulate job growth. He also indicated House Republicans would resist moves to abandon the proposal.

"It's not about cutting taxes. It's not about redistributing income," he said. "It's about putting somebody back on the job that's gone off the job in the last few weeks."

The Senate comes back into session Monday, and will begin debate of the House-Senate education bill conference report, which Daschle said he hopes to have passed by Tuesday.

The House will be in session Monday but will consider no bills on the floor. Members of both chambers still hope to adjourn for the year by the end of the week, freeing them to head home for a multi-week holiday break.


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