Dems seek a further $56 billion

Senate Democratic leaders unveiled their $56 billion economic stimulus package on Thursday, less than an hour before leaving to meet President Bush at the White House to continue the fragile negotiations on the financial rescue bill.

Calling it “an economic recovery package that will help middle-class families struggling in the weakening Bush-McCain economy,” Majority Leader Harry Reid (D-Nev.) and Appropriations Committee Chairman Robert Byrd (D-W.Va.) pitched the plan with the familiar mantra of “not forgetting Main Street.” The plan includes a $7.5 billion down payment on $25 billion in loans for the struggling auto industry.

{mosads}“Democrats believe that we must urgently pass another economic recovery package that will create hundreds of thousands of good-paying American jobs and prevent cuts in critical services for millions of Americans,” Reid said in a statement. “With the economic news only getting worse each day, I call on the president, Sen. McCain and congressional Republicans to join us to quickly get this done for American families.”

Byrd said the plan compensates for “failing to invest in America … the Bush administration has fiddled while Rome has burned.”

After working to strike a deal on an economic stimulus earlier this year, the Bush administration and congressional Republicans have expressed opposition to the Democrats’ new proposal, citing its price tag and the contents of the plan.

At press time Sen. Barack Obama (D-Ill.) said attaching the economic stimulus bill to the bailout package would be a mistake because it would slow down the financial rescue bill.

The proposal was released at 3:13 p.m., just ahead of a scheduled 4 p.m. meeting between Bush and members of Congress. Democrats have been talking about a second stimulus bill for months.

Senior Democratic aides downplayed the significance of the timing, however. One said it was merely “coincidental,” while another emphasized that a stimulus plan has always been part of Democratic demands and Thursday’s proposal was nothing new.

Democratic sources did indicate openness to how the bill is presented — either as an amendment to the continuing resolution that is pending before the chamber, or as a standalone bill.

{mospagebreak}But they also said that the proposal will require 60 votes. Senior Democratic leaders acknowledged that securing the necessary 60 votes will be challenging, especially with only a few days left before Congress is expected to adjourn for the campaign trail.

Republicans strongly criticized the Democrats’ proposal. Sen. Pete Domenici (R-N.M.), for example, noted that the continuing resolution (CR) is already filled with excessive spending.

“They need 60 votes, and I don’t see how that’s possible,” Domenici said. “I respect [Reid and Byrd], but not this idea. The CR is filled with stimulus. We don’t need any more. The stimulus also spends money. We’re spending plenty of money, and we’ll be spending more when we do the bailout bill — not ‘bailout,’ but the ‘fix-our-financial system’ bill.”

{mosads}Highlights of the plan include:

• Unemployment benefits would be extended by seven weeks in all states and by an extra 13 weeks in high-unemployment states.

• Funding increases for food stamps, food banks, the Women, Infants and Children initiative and senior meals programs.

• Funding increases for low-income heating assistance and energy-efficiency programs.

• Increases in the federal funding shares for Medicaid payments to states, to help states coping with budget shortfalls due to Medicaid costs.

• Large increases in funding for infrastructure improvements, as well as funds that will jump-start construction projects and jobs for flood control, mass transit, highways and bridges.

• More funding for a variety of public housing programs, including assistance for homeowners facing foreclosure and funding for an FBI crackdown on mortgage fraud.

• Funding boosts for job training programs as well as small-business assistance.