Columnist Benjamin Grove: U.S. depending on lawmakers to compromise

Benjamin Grove

Friday, Nov. 23, 2001 | 12:51 p.m.

Republicans and Democrats before their holiday break couldn't resolve differences on the economic stimulus bill, despite ever-worsening news. Last week the Labor Department said tourist-dependent Nevada and Hawaii were the states hardest hit by unemployment in October.

The stakes are high, both for the economy and political careers, and members of Congress know it. They don't have to look as far west as Las Vegas to see economic aftershocks of the Sept. 11 attacks. Small businesses, airlines and hotels are reeling in congressional districts everywhere, including in the nation's capital.

Lawmakers would love to make one more grand gesture that proves they did everything they could to rebuild America before they go home for the year.

So it's unclear why lawmakers still can't agree on how to jumpstart the economy, even though they have generally agreed to spend a massive amount of money -- roughly $70 billion to $100 billion -- doing it.

Republican and Democratic disagreements are well-documented, but don't seem beyond compromise. Even as Senate Minority Leader Trent Lott, R-Miss., sparred with Majority Leader Sen. Tom Daschle, D-S.D., earlier this month he admitted, "These are not high hurdles."

Republicans want to use most of the money on several business tax breaks -- measures that would allow corporations to write off capital purchases faster, for example.

Democrats want federal money to extend unemployment benefits 13 weeks to laid-off workers, plus money to subsidize the COBRA health insurance program that would give unemployed workers some relief. Democrats also want $15 billion for anti-terrorism programs, a plan pushed by Sens. Robert Byrd, D-W.V., and Harry Reid, D-Nev.

Reid is also pushing a plan to give tourism-dependent businesses $5 billion in loans that many Republicans haven't embraced.

Other provisions that would help Las Vegas are also up in the air, including a plan that would allow business meals to be 100 percent tax deductible. Yet another proposal would give people tax credits for traveling and tourist trips. Those provisions originally were written to be good only until the end of the year -- little more than a month.

Republicans and Democrats both have valid ideas. GOP leaders argue that tax cuts make investment less expensive so companies will buy more equipment, increase production and hire more people.

Democrats say corporate tax cuts will mostly benefit wealthy corporations. They say new anti-terrorism projects will create jobs and protect America; and aiding the unemployed will put money into the hands of people who will immediately spend it -- stimulating the economy.

With tens of billions to spend, Congress can create a plan that most economists would agree is a reasonable mix of corporate tax breaks, spending programs and laid-off worker relief.

Indeed, signs of a compromise have been spotted. Senate centrists led by Sen. John Breaux, D-La., earlier this month prodded colleagues to consider a $75 billion plan that included scaled back corporate tax cuts and laid-off worker relief.

There is room for a compromise, but the clock is ticking. Lawmakers should negotiate a settlement and do it quickly. It's past time to craft one.

Besides, if the intransigent lawmakers agree to make concessions now, it's not as if their love for political fighting will no longer have an outlet. The lawmakers will have fresh fodder for the 2002 elections, which will allow them to debate endlessly over whose piece of the plan had the biggest boost -- or biggest drag -- on the economy.