As House-Senate negotiations to reach a compromise economic stimulus plan teeter on the edge of failure, Democrats and Republicans are preparing arguments that an agreement could have been reached if only the other side hadn't proven so inflexible.
Republicans, led by the White House, say Senate Democrats have failed to pass a stimulus bill and pursued a blatantly partisan approach that was doomed to failure. The White House stresses that it has worked with centrist Democrats to devise a package with bipartisan support.
Democrats say Republicans have pushed ideas that violate the guidelines accepted by all sides in meetings with President Bush and congressional leaders. Democrats assert they have shown great flexibility in negotiations and that it is Republicans who have been unwilling to bend because of ideological concerns.
Only in Washington could such starkly different perspectives emerge from repeated meetings and negotiations, even in the aftermath of Sept. 11 and countless pledges of bipartisan cooperation. The gulf between Democrats and Republicans on economic issues is so wide -- and the scar tissue from past battles so deep -- that compromise appears all but impossible.
House Republicans and the White House yesterday sought support from moderate Democrats, sweetening some key provisions in an effort to pass a new version of a stimulus bill today or tomorrow. That bill will probably die yet again in the Senate because it will not win the 60 votes necessary to overcome procedural hurdles, just as Democrats could not overcome those same hurdles to pass a bill with a simple majority.
If no stimulus package is approved before the holidays, both sides will be able to point to missed opportunities, misunderstandings and cold political calculations as the reason for failure.
A big part of the problem is that, on economic issues, Republicans and Democrats do not appear to speak the same language. Frequently in the past three months, officials left a room thinking they had an agreement, but in reality participants heard only what they had hoped to hear. Both sides, for instance, cite the "principles" for stimulus established by the president and congressional leaders, but they offer different interpretations of what they mean.
Some of that may be because their goals are so divergent. Republicans have pushed tax cuts for businesses and individuals, but Democrats complain that Republican objectives -- such as repeal of the corporate minimum tax -- violate the agreement that any stimulus should be temporary. Democrats have stressed aid for the unemployed, including assistance with health insurance premiums, that Republicans regard as permanent expansions of government spending programs.
Personality conflicts -- such as the Democrats' disdain for the abrasive chairman of the Ways and Means Committee, Rep. Bill Thomas (R-Calif.) -- have added another hurdle.
"It is very, very, very difficult," complained Sen. John D. "Jay" Rockefeller IV (D-W. Va.), one of the three Senate negotiators. "Thomas talks between 80 to 90 percent of the time at our meetings."
Efforts to bolster the economy after the Sept. 11 attacks started with a burst of bipartisan goodwill. Bush met repeatedly with congressional leaders to devise a common framework, and both sides agreed that time was of the essence.
White House aides say they would have preferred to push cuts in corporate tax rates, but instead accepted Democratic suggestions to allow companies to write off investments more quickly and also to provide rebates to workers who earned too little to qualify for last summer's tax cut.
House Republicans eventually persuaded the president to accept a more partisan approach, and he approved their plan to pass their own bill packed with tax cuts for corporations and individuals. It passed by a margin of two votes, with almost no Democratic support.
The House bill then complicated matters in the Senate because, in addition to the individual and corporate tax cuts, it included the previously negotiated rebate checks for workers and write-offs for business investments that Democrats had sought.
The president "bargained some things away and [put] some things in that I didn't like," said Senate Minority Leader Trent Lott (R-Miss.). Republicans say Democrats have just pocketed these concessions and have not reciprocated, but Democrats respond that these provisions were accepted by all sides in high-level talks.
Senate Democrats, meanwhile, have pressed ahead with a big package to aid the unemployed, citing the advice of Federal Reserve Chairman Alan Greenspan and former treasury secretary Robert E. Rubin that lawmakers needed to find ways to help boost consumption. In response to the House action, Senate Democrats assembled their own bill with no Republican input. But Republicans blocked it on the Senate floor, invoking a procedural rule requiring 60 votes for passage when the Democrats could muster only a bare majority of 51 votes.
Democrats said they since have backed off their insistence on $15 billion in spending on homeland security, accepted the idea of a health insurance tax credit rather than direct premium payments to the unemployed, agreed to a small cut in individual tax rates and to a repeal of parts of the corporate minimum tax. They also are prepared to drop the idea that people who leave their jobs voluntarily can qualify for the tax credit.
The White House, for its part, has backed off full repeal of the corporate minimum tax, boosted its spending package for the unemployed and dropped some of its rate cuts -- though House Republicans are not necessarily in full agreement.
But these apparent concessions weren't enough to appease the other side -- and any further movement would run the risk of losing support for a deal among partisans. The structure of the health insurance tax credit, for instance, has become a key roadblock to a deal, with philosophical differences, not money, making agreement impossible.
Republicans want the tax credit to go to individuals; Democrats would like to keep it rooted in the current employer-based system, in which workers who lose their jobs can continue to buy insurance through their previous employer. The underlying ideological difference concerns whether health insurance should be primarily bought by individuals or should continue to be offered mostly through employers.
A White House official said the administration was willing to increase funds available for health insurance assistance if Democrats agreed to the Republican proposals to target the credits to individuals. Rockefeller said he told Thomas he would accept the GOP structure -- "which I have spent a lifetime fighting" -- if the GOP promised to cover everyone who applies for health insurance, ensure comprehensive benefits and charge affordable premiums. Thomas said that was tantamount to price controls, which he could never accept.