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Economic stimulus bill dead until next year

Daschle said the latest compromise "is wrong on all counts."  

WASHINGTON (CNN) -- Senate Republicans failed to get a House-passed economic stimulus bill to the floor for a vote Thursday afternoon, placing the legislation on the shelf for the rest of the year.

Republicans, led by Minority Leader Trent Lott of Mississippi, attempted to bring the bill up for two hours of consideration and a vote late in the afternoon using a procedure known as a unanimous consent agreement.

Had Lott's request been honored, regular Senate rules would have been set aside and the bill would have been debated.

Senate Majority Leader Tom Daschle, D-South Dakota, speaking to reporters Thursday morning, said he looked one more time at the economic stimulus bill, passed just hours before by the House, and didn't like it.

"We've looked at the compromise one last time and concluded it is wrong on all counts," The Senate leader said. "There is very little stimulus in this stimulus package."

"We are going to have to keep the effort to find some mutual agreement at a later date. We're not going to do that today," Daschle said. "We certainly have to work to extend unemployment benefits."

"The stimulus is dormant," Daschle added, falling short of calling the bill dead. "Our hope is that it can be revived early this coming year."

Responding to Lott on the unanimous consent request, Daschle said he would be willing to call a voice vote on one provision of the bill -- a 13-week extension of unemployment benefits.

Neither side's position was acceptable to the other, and the issue was quickly dropped, ending the bill's prospects until at least next month.

The House bill, which passed 224-193 in the waking hours of Thursday morning, was championed by the White House.

President Bush, anticipating the Senate would set it aside, pasted Senate Democrats at an afternoon event to promote charitable giving.

"As a result of the September 11 attacks, people have lost work," Bush said at Washington, D.C.'s Martha's Table. "We've been working hard to get the Congress to take care of unemployed people."

"Republicans and Democrats decided to set aside the typical partisanship that takes place in Washington and put a pretty good package out there," Bush said.

"Unfortunately, that particular piece of legislation was declared dead before it even got to the Senate floor."

The package, crafted in negotiations with White House officials, House Republicans and several Senate centrists, including Democrat John Breaux of Louisiana, would have cost the government $86 billion next year and $148 billion over 10 years, according to Rep. Bill Thomas, R-California, chairman of the Ways and Means Committee.

The authors touted the bill for including both Republican priorities -- tax cuts -- with Democratic priorities -- more aid for the unemployed.

The bill included the 13-week extension of unemployment benefits for workers who lost their jobs after the recession began in March.

Those same workers would have been eligible for a government voucher to pay 60 percent of their health insurance costs.

Republicans said their plan would have offered displaced workers the option of buying their health insurance through their previous employer or buying it on the open market.

It was the latter point that caused negotiations to fail, members from both parties said.

Democrats said Republicans were trying to undermine the country's tradition of employer-based health insurance, unpopular with many conservatives.

Republicans, who said the Democrats' proposal did not cover everyone in need, defended their own plan as the best way to ensure all displaced workers receive assistance to buy health insurance.

Late Wednesday, Republican leaders also added $4.6 billion to the bill to help states cover their anticipated spikes in Medicaid expenses as more and more unemployed workers turn to that health care plan, which is jointly run by the federal government and the individual states.

For corporations, the bill would have modified the corporate minimum tax, a tax created in the mid-1980s to ensure profitable corporations pay at least some taxes.

Republicans originally wanted to repeal that tax and give corporations tax credits for all the minimum taxes they have paid since the tax began -- which could have meant hundreds of millions of dollars for companies such as IBM and General Motors. But Republican leaders dropped that proposal in the bill that passed the House on Thursday.

In an effort to spur corporate investments in the next three years, the bill allows companies to write off more of their capital expenditures right away.

For individuals, the bill reduces immediately the 27 percent income tax rate to 25 percent. The rate reduction was passed earlier this year in a giant tax relief bill, but the stimulus bill accelerates the reduction -- which otherwise would have taken four years -- in order to get more cash into the hands of middle-income consumers.

Also, millions of low-income individuals who did not qualify for the $300-per-person (or $600-per-family) tax rebate as part of the earlier tax bill will now qualify.

House Speaker Dennis Hastert of Illinois, saying he was tired and frustrated after a long night, hinted Thursday he thought Bush should call Congress back into session just after the New Year to get back to work. The House and Senate are not scheduled to return to action until January 23.

"If I were the president, I'd call the Congress back on the second of January to finish the work," Hastert told reporters. "I plan to have a talk with the president today."

Moments after the speaker made his comments his aides moved to downplay them.

"The speaker is frustrated with the Senate," an aide said. "The fact of the matter is that if anyone needs to be called back to finish its work it's the Senate."

-- CNN's Ian Christopher McCaleb and Manuel Perez-Rivas, Congressional Correspondent Kate Snow, and Capitol Hill producers Ted Barrett and Dana Bash contributed to this report.


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