Talks resume amid new optimism on stimulus plan

WASHINGTON -- Republicans and Democrats were back at the bargaining table Thursday after concessions by both sides reinvigorated negotiations over economic stimulus legislation to grant broad benefits to the unemployed and cut taxes for individuals and businesses.

A bipartisan group of House and Senate members, joined by Bush administration officials, met behind closed doors for a second day, with prospects brightening that a deal could be struck before Congress recesses for the year. Talks were likely all day and could well continue beyond that.

"I hope we get something done. I think everybody wants to," said House Speaker Dennis Hastert, R-Ill.

The sessions resumed Wednesday night, shortly after Senate Majority Leader Tom Daschle offered to back a modest acceleration of income tax cuts. He also said a deal no longer had to pass muster with two-thirds of the 50 Senate Democrats, which Republicans had insisted would effectively block their tax cuts.

"What helped us was the agreement it wouldn't be the two-thirds thing," said Rep. Bill Thomas, R-Calif., the House Ways and Means Committee chairman.

Those moves by Daschle followed important concessions by President Bush on unemployment benefits and health insurance aid sought by Democrats. The White House also has exerted steady pressure for compromise.

"We're going to the heart of the matter," said Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee.

Daschle, D-S.D., said earlier Wednesday it would be almost impossible for rank-and-file Democrats to support earlier effective dates for any of the income tax cuts scheduled to go into effect in 2004 and 2006. Yet several sources said Daschle offered, in a late-afternoon meeting on Capitol Hill with Treasury Secretary Paul O'Neill, to agree to reducing the 27 percent rate to 26 percent.

Bush gained some support from centrist Senate Democrats by bringing aid in his stimulus plan to the unemployed to nearly $30 billion. His revised proposal includes a new 50 percent health insurance tax credit that could be paid to jobless people in advance and a 13-week extension of unemployment benefits.

Bush also eased up on his income tax proposal, which originally sought to make all the future rate cuts in the recently enacted 10-year, $1.35 trillion tax relief plan take effect in 2002. Bush now wants to move up to 2002 only the cut in the 27 percent rate to 25 percent and has dropped his demand that the corporate alternative minimum tax be repealed.

A senior Treasury official, speaking with reporters on condition of anonymity, said the Bush administration has moved a long way toward Democratic positions in favor of assisting displaced workers and limiting tax cuts.

"This is the middle ground," the official said. "We're trying to do everything we can to get Daschle on board."