Senate Democratic leader Thomas A. Daschle (S.D.) called yesterday for a $300-per-person income tax rebate, plus federal aid to financially strained states, in an attempt to find common ground among the 10 or more Democratic plans that have been floated on Capitol Hill to help boost the stalled economy.
Even though the plans are similar in many respects, the sheer number of them causes Democrats to appear to have more ideas than focus. That puts them at a disadvantage in articulating a clear alternative to President Bush's plan to speed up income tax cuts and stop taxing dividends.
Thematically, Daschle's proposal reflected most of the other Democratic initiatives in that it would spread the tax breaks more evenly than Bush's plan, add less to anticipated deficits and provide financial help to states and localities. It would include an immediate, one-time tax cut, or rebate, of $300 per adult and another $300 per child, up to two children per family. Those who pay no income taxes would be eligible if they pay Social Security and Medicare payroll taxes.
The plan calls for more immediate tax relief for business investments in new equipment, along with several proposals targeted at small businesses, including a tax credit to help pay health insurance premiums. State and local governments would get $40 billion, including funds designated for anti-terrorism activities, education and rising Medicaid costs. Unemployment benefits would be extended for 1 million jobless workers who have already exhausted their assistance.
Daschle's one-year plan would cost $141 billion, far less than the $674 billion, 10-year cost of Bush's proposal.
Among the Democratic plans, there are enough common themes -- including an immediate, across-the-board tax cut and aid to the states -- to suggest that Democrats are together on most fundamentals.
But there are enough differences, especially in proposals by senators planning presidential campaigns, to clutter the Democrats' message as they prepare for battle against Bush's plan. At least four plans have been offered by probable presidential contenders, one from House Democrats and others from senators not running for president.
For Democrats, the differences are more in packaging than substance. But clarity goes a long way in politics, and even superficial differences can prove important.
It was partly for this reason that Daschle, after briefing his Democratic colleagues earlier this week, unveiled his plan with considerable fanfare before the City Club of Cleveland.
"It is an attempt to pull it all together," said Daschle spokeswoman Ranit Schmelzer. The plan was modeled, she said, on those already advanced by Sen. Max Baucus (Mont.), the Finance Committee's ranking Democrat, and others.
The Democrats' search for a focus on taxes is a key part of their larger struggle to define themselves in a compelling way as they approach the 2004 battles for the White House, Senate and House, all now controlled by Republicans. The irony is that Bush appears to face more dissension within the GOP over his proposals than Democrats face among themselves over major elements of their plans.
While prominent Republicans, including Senate Finance Committee Chairman Charles E. Grassley (Iowa), have suggested that Bush's plan may face serious surgery, Democrats, who have often fought among themselves over fiscal policy, appear more unified than normal on fiscal policy. Daschle and Baucus, for instance, were at odds in dealing with Bush's 2001 tax cuts but appear relatively close now.
While there is virtually no chance that the Senate would approve Daschle's proposal, the plan might rally Democrats, help refine their message and present opportunities for compromise
The plan announced earlier this month by House Minority Leader Nancy Pelosi (D-Calif.) includes nearly all of the elements of Daschle's plan, such as the $300 rebate. Baucus's proposal goes at the rebate idea by a different route, exempting income taxes on the first $3,000 of now-taxable wages, with a refund to those who earn too little to pay income taxes.
A day before Daschle's presentation, Sens. Mary Landrieu (D-La.) and Jon S. Corzine (D-N.J.) outlined a different way of reaching the same goal: to exempt the first $10,000 of a worker's pay from payroll taxes.
Former House Democratic leader Richard A. Gephardt (Mo.) and most of the Democratic senators who are planning or considering a presidential race have proposed variations on these themes.
Sen. John Edwards (N.C.) wants a $500 refundable energy tax credit for all families. Gephardt proposed $125 billion in spending for specific areas such as homeland security and school construction, and $75 billion in tax relief for families.