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Daschle offers to break impasse on economy bill

Daschle: Aides say he was "encouraged" after meeting with GOP leader Trent Lott.  

By Dana Bash
CNN Washington Bureau

WASHINGTON (CNN) -- Senate Majority Leader Tom Daschle proposed Tuesday to break the impasse on the economic stimulus package by bringing a scaled-back version of the legislation to the Senate floor for a vote.

In a letter to President Bush, Daschle called for "a non-partisan, common sense approach" to what he labeled "economic recovery."

"Let's immediately pass what we agree on, and keep working to find common ground in the areas where we still disagree," Daschle told Bush.

Daschle, D-South Dakota, said he wants to bring up an economic stimulus bill with four provisions:

-- An extension of the 26-week unemployment benefit by another 13 weeks.

-- Payroll tax rebates for those who do not pay income tax and therefore did not receive a check last year.

-- Tax breaks for businesses by allowing them to accelerate tax deductions for equipment.

Bush touts tax cuts to improve economy 

-- Money to help states, most of which are running budget deficits.

The overall cost, according to a Democratic aide, would be about $69 billion next year.

Senior Democratic leadership aides said Daschle met with Senate Minority Leader Trent Lott, R-Mississippi, Tuesday to propose his idea and came away "encouraged."

Lott also sent a letter to the president in response to Daschle's proposal.

"It now appears that Senator Daschle is reconsidering," Lott told Bush. "This is an encouraging development and one which leads me to believe that we may be able to move this process along toward economic recovery legislation which you could sign in the near future."

But, Lott wrote, there needs to be a more comprehensive solution than the Daschle proposal.

"While a 'least common denominator' approach may be sufficient to break the Senate logjam, it does an American worker little good if it doesn't create an environment in which people who want to work can find work," his letter said.

Legislation to stimulate the economy was caught in a partisan stalemate at the end of last year.

Republicans dug in on their proposals to accelerate tax cuts passed into law last year and cut corporate minimum taxes.

Democrats held firm on their desire to expand unemployment benefits for part-time and temporary workers who are currently not eligible.

Talks were also stuck over how to administer health benefits to unemployed workers.

Neither Democrats nor Republicans could muster the 60 votes to overcome a filibuster for their own plans, and despite efforts by centrist legislators to find common ground, no compromise was reached.

The congressional session ended with each party blaming the other for the bill's failure.

Republicans called Daschle an obstructionist, standing in the way of compromise for political gain.

"We can't stare at each other across the political divide forever," said a senior Democratic leadership aide.

"Why not drop back to a bare bones package of common elements that we know would be good for the country and we know both parties have already supported in the past?"

The Democratic aide said the Senate could take up such legislation as early as Wednesday, the first day of the Congressional session.

Sen. Charles Grassley, R-Iowa, the lead Republican on the tax writing Finance Committee, was lukewarm to the idea, calling for votes on each party's "full-fledged stimulus package."

"If both of those fail, then a scaled-back stimulus package probably could be a viable option," Grassley said in a written statement.

A spokesman for Lott said that without broad agreement it would be hard for Daschle's proposal to gain traction.

In addition to an economic stimulus package, Democratic aides said Daschle planned to bring election reform, energy reform and the farm bill before the Senate.


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