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Tuesday, February 5, 2008   

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Recession worries dominate Montana's reaction to Bush address

Recession worries dominated Montanans' reactions to President Bush's final State of the Union address Monday night.

Sen. Max Baucus agreed on the importance of quickly passing and signing into law an economic stimulus plan that will help boost the nation's faltering economy — although he preferred his own plan to the president's.

Earlier Monday, Baucus unveiled his economic stimulus proposal that would provide a flat $500 rebate to each American reporting at least $3,000 of income on their 2007 tax return, and families would receive an additional $300 per child under age 17. Baucus is chairman of the powerful Senate Finance Committee, which has jurisdiction over all taxes and revenue.

But Bush's proposal to offer tax rebates struck Larry Swanson, an economist who's director of the Center for the Rocky Mountain West, as a "fairy-tale solution."

"For the past seven years, we've had deficit spending and tax cuts as a basic part of our policy," Swanson said.

"Now with a 50 percent chance of recession over the next year, we propose to do more spending cuts and more deficit spending," he said. "But that's how we got where we are."

With a national debt of $9 trillion — up from about $5.7 trillion when President Bush first took office — the nation is now spending about $400 billion a year paying the interest on the money we've borrowed, he said. That compares to spending just $60 billion on education.

And now Bush is proposing to add another $150 billion in debt to stimulate the economy, he said.

"And out of that $9 trillion national debt, approximately $2 trillion of it is owed to the Social Security Trust Fund," said Swanson. "With a projection that the number of people over 65 years old will double in the next 20 years, this is insanity in my mind."

Erik Iverson, chairman of the Montana Republican Party, was impressed with the president's emphasis on clean energy, clean coal, carbon capture and renewable energy programs.

"Having the largest recoverable coal reserves in the country, but being only number six in coal production means that we're going to have a lot of work to do if we're going to reach our potential," he said.

"The president's emphasis on clean energy programs was very encouraging because that's very important for Montana," said Iverson. "We have to find a way to advance those technologies."

But Iverson thought agriculture was virtually forgotten in the State of the Union address.

"A new farm bill is important to Montana,said Iverson. "I would have liked to have seen greater emphasis on a new farm bill because we have to have one."

Dennis McDonald, chairman of the state's Democratic Party, was also concerned about the lack of emphasis on agriculture.

"And I don't believe the tax rebates will do much to solve our economic problems because we live in a time of spiraling deficits, spiraling foreign trade deficits, and historically high fuel prices," said McDonald.

"This plan really does nothing but increase the national debt," he said. "It does nothing to expand business, create jobs or encourage our citizens to save or invest.

"And it does nothing to rebuild our country's infrastructure, promote education or rebuild the nation's confidence," McDonald said.

He did praise the president's call for renewed charitable giving, but said the highlight of his evening was watching Montana's two Democratic senators enter the chamber for the address.

Sen. Jon Tester praised Bush's increasing support of veterans' issues.

"We've done a lot over the past year to move veterans' issues forward to make sure they get the health care they were promised," he said. "After not hearing the word 'veteran' once during last year's State of the Union, it's good to see President Bush finally realizes that the status quo for our veterans is unacceptable. It's time for him to pay more than lip service.

"Our troops have made military progress in Iraq because they're the best in the world," said Tester. "It's too bad the president hasn't made it a priority to make diplomatic progress there. Until he does, Iraq will be using our presence as a crutch—at a cost of $3 billion every week."

Rep. Denny Rehberg, R-Mont., called for a cooperative approach: "There are a lot of important issues we must address. From passing an economic stimulus package to completing critical unfinished business like the Farm Bill and SCHIP ((the State Children's Health Insurance Program), there's plenty of work to get done. The American people want results. It's time for Congress and the president to work together in a bipartisan manner to reach some consensus and find solutions."

Reach Tribune Projects Editor Eric Newhouse at 791-1485, 800-438-6600 or enewhouse@greatfallstribune.com



Originally published January 29, 2008

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Baucus stimulus plan adds benefit for senior citizens

WASHINGTON (AP) — A top Senate Democrat unveiled a $156 billion economic stimulus package Monday that awards rebates to senior citizens living off Social Security and extends unemployment benefits, setting up a clash with President Bush and House leaders pushing a narrower package.

Compared to the plan to be considered Tuesday by the House, rebates for most income earners would dip by $100 to $500 for individuals and by $200 to $1,000 for couples under the proposal by Senate Finance Committee Chairman Max Baucus. People would still receive an extra $300 per child, and even the wealthiest taxpayers would be sent a rebate.

The move was in defiance of admonitions from Bush not to risk derailing the deal with the House, and it threatened to slow what was shaping up as an extraordinarily rapid trip through Congress for the stimulus measure. The Senate hopes to pass its version by week's end.

"My proposal will give America's seniors the same rebate as any wage earner," said Baucus, D-Mont. "The White House says we mustn't slow the economic stimulus agreement down, or blow it up. I agree. We're going to improve it and get it passed right away."

Senate Majority Leader Harry Reid, D-Nev., said he supported the Baucus effort and stated his intention "to take legislation to the floor as quickly as possible to strengthen the economy."

However, House Ways and Means Committee Chairman Charles B. Rangel, D-N.Y., warned that the Senate was "walking on very thin ice" with the proposal to send rebates to wealthier taxpayers, which he said could jeopardize the entire package.

"By eliminating the income cap, we would only further grow the divide between rich and poor that has already grown so much under President Bush's policies," Rangel said. Adding an unemployment extension or other spending such as food stamp, Medicaid or heating assistance could improve the plan, he said.

Bush and House leaders agreed last week on a proposal to provide rebates to 117 million families and to give businesses $50 billion in incentives to invest in new plants and equipment. The goal is to help head off a recession and boost consumer confidence.

Senate Republicans and Democrats — kept on the sidelines as House Speaker Nancy Pelosi, D-Calif., and Minority Leader John A. Boehner, R-Ohio, cut the deal with Treasury Secretary Henry M. Paulson last week — were eager to put their stamp on the high-profile package.

Sen. Mitch McConnell, R-Ky., the minority leader, urged senators to refrain from trying to swell the size of the package.

"A number of senators have expressed a desire to add tens of billions of dollars in spending on contentious programs to this package, but we don't have the time for ideological debates. In order for this plan to work, Congress needs to act, and act at once," McConnell said.

Republicans, though, were among those calling for additions to the plan.

"Many of these additions have bipartisan support, and I hope that the president will recognize that the White House needs to negotiate with the Senate as well as the House," said Sen. Susan M. Collins, R-Maine, who backs both the rebates for seniors and the unemployment extension.

Sen. Olympia J. Snowe, R-Maine, a Finance Committee member, called the unemployment extension "critical" and said she supported ensuring that the rebates reached the elderly.

In another key difference, Baucus' plan would send rebates to all Americans with earned income of $3,000 or more, while the House plan gives only partial rebates to individuals with adjusted gross incomes of more than $75,000 and couples with incomes in excess of $150,000, and no rebate at all to the wealthiest taxpayers.

Bush was pushing for Congress to move quickly on the agreement without additions.

"The president is concerned about efforts that would delay or derail the bipartisan package that was negotiated with House leaders," White House spokesman Tony Fratto said. "The Senate is threatening to create partisan conflict by trying to put in additional programs."

Still, pressure from the elderly and labor unions — both politically potent forces — spurred senators from both parties to call for the extras.

The House plan leaves out some 20 million seniors, according to the AARP.

The Senate measure includes a 13-week extension of unemployment payments for those whose benefits have run out, and a 26-week extension in states where the jobless rate exceeds 6 percent.

Including seniors who don't pay taxes "is a good step," said David Certner, AARP's legislative director. He said senators were responding to a flood of elderly people who have contacted lawmakers about the stimulus plan and asked, "'Why aren't seniors part of this rebate package? We're hurting. We spend money."'

The Senate measure also restores a business tax break dropped from the House bill that would permit corporations suffering losses now to reclaim taxes previously paid.

"This is a package in sync with the House bill but stronger and broader," said Sen. Charles E. Schumer, D-N.Y. "We hope and expect it will get bipartisan support."




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