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Democrats, Republicans Argue Over Size of Tax-Reduction Package - 2003-05-06


The battle over President Bush's plan to stimulate the economy continues to play out on Capitol Hill. Democrats are putting forward competing proposals they say will do more than the plan by the president, and versions by congressional Republicans, to create jobs through tax reduction while causing the least growth in deficits.

In separate news conferences Tuesday, Republicans and Democrats sought to seize the momentum on the tax issue.

Democrats again pointed to job loss figures in the United States as proof, they said, that President Bush's tax cut proposals, one of his key domestic priorities, would create long-term problems for the economy.

Senator Tom Daschle outlined a Democratic proposal he says would give more immediate tax relief to average Americans, while doing more to help small businesses and financially-strapped cities and states.

"Our plan puts America back on the path of fiscal responsibility," he said. "It provides three times more economic boost, this year when we need it the most, than the Republican plan at a fraction of the cost. And it doesn't create huge, permanent new obligations that will worsen our long-term economic situation."

Just before Mr. Daschle spoke, President Bush, in a speech to the U.S. Chamber of Commerce, again urged Congress to approve the deepest tax cut possible.

Back on Capitol Hill, supporters of the president lobbied lawmakers, and crowded into a Senate hearing room, where they were addressed by, among others, Republican Senator Don Nickles.

"I see these signs that say Americans want jobs and growth. That's exactly what we want. We want to create growth and jobs, we want to have more opportunities for all Americans," he said. "The Democrats have a different formula they want to grow government."

The White House cautiously welcomed a plan by the Republican chairman of the Senate finance committee to include in Senate legislation a temporary modified version of President Bush's proposal to eliminate taxes on stock dividends.

Meanwhile, administration witnesses subjected to sharp questioning by Democrats during a key House of Representatives committee session defended the proposals by the president and Republicans, calling them essential to economic recovery.

There was a heated exchange between Democratic) Congressman John Lewis and Pamela Olson, assistant treasury secretary for tax policy.

John Lewis: "Is this proposal a leap of faith?"

Pamela Olson: "Mr. Lewis, I don't believe it's a leap of faith. Indeed, the longer I look at it the more I believe it is an essential change for us to make."

Senate Democrats plan to unveil specifics of their plan later this week, although some details are known, including tax credits for families and incentives for small businesses.

President Bush originally proposed a $726 billion economic plan, but was forced to lower his expectations for his proposed tax cut, the second such major reduction in his first term.

Mr. Bush now wants any final bill emerging from Congress for his signature to contain at least $550 billion in tax cuts, the level approved by the House. The Senate has set a $350 billion level in a final bill.

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