Democrats Ready Anti-Recession Plan, But Have They Waited Too Long?
May. 12, 1991
WASHINGTON (AP) _ Congressional Democratic leaders are crafting legislation to combat the recession - possibly including tax breaks and expanded jobless benefits - 10 months after the downturn began and just as some analysts believe the economy is starting to recover.
Democrats remain divided over the final shape of what is expected to become a multibillion-dollar plan. But the crown jewel, in terms of political appeal, is likely to be tax cuts for middle-class and low-income people coupled with higher levies on the rich.
The plan is also likely to extend unemployment insurance benefits for people whose payments have expired. And it will probably claim to create jobs by launching a road-building initiative - although the federal highway program was up for renewal this year anyway.
Although jobs have been vanishing and the economy shrinking for nearly a year, Democrats have been leery of advancing an anti-recession package so far.
This has frustrated many Democratic lawmakers and lobbyists for the poor and for labor, who note that a program is beginning to take shape just as signs emerge that joblessness may be easing.
''The Democratic Party has missed the opportunity thus far to seize the initiative,'' said freshman Rep. Robert Andrews, D-N.J. ''I'd like to be able to go back home and say the leadership of our party has a program that's going to put them back to work.''
The reason for the Democrats' reluctance to charge ahead: fear of President Bush, who opposes recession-relief legislation and predicts that the downturn will end soon. Democrats are concerned that the president would try to batter them politically over the increases in taxes, spending and the deficit that their programs would produce.
''The president doesn't support it and he's had a very good track record on vetoes,'' said Rep. Dale Kildee, D-Mich. ''The Democratic Party ... really didn't know how to deal with him on these matters.''
''I think they're cowed,'' said Robert Fersh, executive director of the liberal Food Research and Action Center, which wants extra money for nutrition programs for the poor.
To immunize themselves from attacks by Bush, Democrats had planned to begin publicizing their anti-recession plan as early as May 3, say congressional aides and lobbyists who spoke on condition of anonymity. That was the day they expected the government to announce that the unemployment rate had jumped to 7 percent or higher.
Instead, the Labor Department announced that the jobless rate fell to 6.6 percent in April from 6.8 percent a month earlier.
''Right now, it's basically on hold ... until more numbers come in and we see where we are,'' said House Budget Committee Chairman Leon Panetta, D- Calif.
Nine years ago, Congress and President Reagan fought a recession by raising the gasoline tax a nickel a gallon and using the money to repair roads, a program designed to create 320,000 jobs.
But this time around, the White House is not so willing to cooperate. In his most recent address to Congress on March 6, Bush devoted just four sentences to the economy, asserting that ''confidence is rightly coming back.'' He made no mention of any need for any legislation.
Congressional Republicans also oppose anti-recession legislation, saying that the $300 billion federal deficit means the government is already pouring enough money into the economy.
''It's difficult for me to understand the argument that $300 billion worth of pump-priming isn't enough to turn things around,'' said Rep. Willis Gradison of Ohio, a top Republican on economic issues.
But Democrats insist the recession is for real, noting that there are still 8.3 million unemployed people, and indications remain that the economy is continuing to contract.
''I don't intend to stand idly by and watch this recession grow more severe and not take action to help millions of American men and women and their families,'' Senate Budget Committee Chairman James Sasser, D-Tenn., said.
One group Democrats want to help is the 4.7 million jobless Americans who are not collecting unemployment benefits.
Rep. Thomas Downey, D-N.Y., is putting the finishing touches on a plan to provide unemployment insurance benefits for more people whose 26 weeks of payments have expired. It could also help many people who did not qualify in the first place.
Sen. Donald Riegle Jr., D-Mich., has proposed a similar measure as part of a package that also increases spending for job training and health, food and housing programs for the poor.
Other moves include:
-House Speaker Thomas Foley, D-Wash., and House Public Works Committee Chairman Robert Roe, D-N.J., are talking about another 5-cent-per-gallon gasoline tax increase to raise money for another road-building program.
-House Appropriations Committee Chairman Jamie Whitten, D-Miss., and his Senate counterpart, Sen. Robert Byrd, D-W.Va., have ordered federal agencies to submit lists of construction projects they need.
-Downey, Sen. Albert Gore Jr., D-Tenn., and two other House Democrats last week unveiled a tax package that would lighten the tax load on 134 million Americans while boosting levies on the richest 15 million.