Negotiators Grappling With Stimulus Plan

Senate Majority Leader Harry Reid (D), right, has scheduled a briefing on what he refers to as President Bush's
Senate Majority Leader Harry Reid (D), right, has scheduled a briefing on what he refers to as President Bush's "legacy of broken promises." Sen. Charles Schumer (D), left, has assured mayors that a stimulus package would help offset a looming state and local budget crunch. (By Jay Mallin -- Bloomberg News)
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By Jonathan Weisman and Peter Baker
Washington Post Staff Writers
Thursday, January 24, 2008

The White House and congressional leaders struggled yesterday to preserve their newfound alliance on the economy in the face of revolts in both parties over the shape of a potential stimulus package and of debates over issues such as health care and warrantless surveillance.

Treasury Secretary Henry M. Paulson Jr. and House Speaker Nancy Pelosi (D-Calif.) neared agreement last night on a tentative plan aimed at reinvigorating a battered economy. Pelosi met last night with committee chairmen while Paulson was running the tentative agreement by the White House ahead of what could be a final meeting this morning.

But there were signs that the bipartisan spirit of recent days was beginning to fray. Some Republican lawmakers, including the party's Senate whip, tried to slow the momentum toward a deal while Democrats piled on additional spending demands.

At the same time, unrelated disputes threatened to divide President Bush and Democratic congressional leaders as they are seeking to remain unified on the economy. House Democrats tried and failed yesterday to override Bush's veto of an expansion of a children's health-care program, while Senate Democrats tried to block the permanent extension of the government's authority to eavesdrop on terrorism suspects without warrants.

Bush advisers and congressional leaders working on the economic package recognized that they need to hurry, not only to influence the economy as soon as possible but also to prevent Washington's natural partisan dynamics from pulling apart the chances for success. "The longer something sits out there, the more additional things get on the table," said a senior administration official who spoke on the condition of anonymity because talks remain underway.

There were signs that both sides were trying to avoid at least some provocations until an economic package is passed. House Democrats decided to hold off any action on contempt citations against White House Chief of Staff Joshua B. Bolten and former White House counsel Harriet E. Miers over the investigation of the firings of U.S. attorneys. And Vice President Cheney avoided his usual red-meat attacks in a speech arguing for the surveillance measure.

White House spokesman Tony Fratto said that when it comes to the economic package, "it's pretty clear that everyone is trying to talk these things through in good faith, and there's a sense of urgency. And so that will brace you to action."

But some top lawmakers quickly returned to the partisan scrapping of last year. House Democratic Caucus Chairman Rahm Emanuel (D-Ill.) called a news conference to denounce the seven years of Bush's stewardship, which have been marked, he said, by slow job growth, a mounting federal debt, sliding household incomes and a plunging world public opinion of the United States. "By any measure," he said, "America is worse off today, over the last seven years, than it was as a country that George Bush inherited." And Senate Majority Leader Harry M. Reid (D-Nev.) scheduled a news conference for today in which Democratic senators plan "to discuss Bush's legacy of broken promises."

Rep. Mike Pence (R-Ind.) fired back, blaming the nation's economic ills on the Democratic-controlled Congress. "One year into a liberal Democrat majority in Congress, surprise, surprise, the economy is struggling," he said. "You don't need to apply liberal principles and policies on an economic slowdown that is being driven by liberal policies on Capitol Hill."

And the White House risked the ire of Senate Democrats by renominating Steven G. Bradbury as assistant attorney general despite lawmakers' refusal to confirm him because he signed off on memos authorizing harsh interrogation techniques of terrorism suspects.

Negotiators tried to ignore the surround-sound and to focus on working out a deal. Paulson met several times and spoke by telephone repeatedly with Pelosi and House Minority Leader John A. Boehner (R-Ohio) to hammer out the details of a $145 billion economic-stimulus package. Aides reported that they had the outline of a deal and were crunching numbers last night to see if they worked.

The broad outlines of a package have been clear for days: tax rebates for individuals to spur consumer spending, business tax breaks to prompt new investment and the extension of social welfare benefits such as unemployment aid and food stamps. But one congressional official said Democrats might give up the unemployment and food stamp spending in exchange for a progressive rebate plan that sent checks to all workers who make less than $75,000 a year or married couples who make less than $150,000.

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