“It is unfortunate that we were unable to move the economic stimulus legislation forward,” Senate Majority Leader Tom Daschle (D-SD) said after two competing economic stimulus bills failed to receive the 60-votes needed to end debate.
Partisan differences were blamed for the cloture failures, which technically allow debate to continue without limits, but instead usually result in the legislative item being set aside, at least temporarily.
Daschle’s $70 billion stimulus package included: a $300 check to those who didn’t receive a refund from last year’s tax cut, $5 billion in Medicaid funding to states; and a tax break for businesses that buy equipment in 2002. It failed by a 56-39 vote.
In comparison, the Republican-supported Grassley proposal allocated $89.8 billion in tax cuts and other benefits in an effort to stimulate the economy. The measure, which was rejected by a 48-47 vote, would have sent out rebate checks to low income workers, repealed the corporate alternative minimum tax, and provided $3 billion to states to help the unemployed maintain health insurance.
Also included in the Grassley package were several business tax breaks including: a 30 percent deduction for capital purchases; an $11,000 increase in the amount small businesses are allowed to expense; a three-year extension of “carryback” of general net operating loss write-offs; and a reduction in the 27 percent income tax rate to 25 percent this year.
Both stimulus packages extended unemployment benefits by 13 weeks, and increased the tax credit allowed in adoption cases.
Senate Majority Leader Tom Daschle (D-SD) said he had been hopeful the Senate could approve a bipartisan economic stimulus package in the same way they came together to pass emergency legislation following the wake of the Sept. 11 terrorist attacks
Shortly before the motion for cloture was made, Daschle blamed the Republicans’ “refusal to negotiate,” for the doom of the economic stimulus package. “The Republicans argued about everything from the shape of the table to whom was present in the room,” he said.
In an attempt to break the impasse, Daschle returned from the holiday break with an economic stimulus package he said included only those provisions with broad bipartisan support. The provisions included 13 weeks of extended unemployment benefits, tax rebates, bonus depreciation allowances, and fiscal relief for states.
“Both parties had ideas the other side didn’t like, so I focused on the common elements that both parties wanted in an economic stimulus bill to break the impasse. However, what the Republicans are saying is that they want all or nothing,” he said. “What could possibly be wrong with sending out a bill that the House, Senate and White House could work out in conference?”
Two elements that apparently were non-negotiable for both parties were the Republican initiatives to make permanent both the repeal of the estate tax and the Bush tax cut plan. Both proposals would have taken effect 2011, at an estimated cost of $104 billion for the estate tax provision, and $350 billion over the first 10 years of the tax cut plan.
The move also meant that an amendment providing $1.8 billion in disaster assistance for farmers — passed by the Senate last week — will not advance. Sen. Max Baucus, D-Mont., offered the amendment.