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Democrats Ramp Up Criticism as Republicans Prepare Tax Bill Markups

Using staged audiences and the media, Democrats and Republicans promoted their competing economic stimulus plans Tuesday ahead of two critical markups.

Democrats addressed union leaders while Republicans packed a Senate room with North Carolinian families bused in by Citizens for a Sound Economy, a conservative group headed by former House Majority Leader Dick Armey (R-Texas).

“The Republican plan, by comparison, doesn’t invest in what working Americans need,” Senate Minority Leader Tom Daschle (D-S.D.) said of Senate Finance Chairman Chuck Grassley’s (R-Iowa) plan unveiled only minutes earlier. “It will create fewer jobs. It weakens Social Security. It slights middle-class families in favor of the wealthy.”

Late Monday, Grassley acquiesced to his party leaders’ demand that he find a way to fit President Bush’s $396 billion dividend tax-cut proposal into his $350 billion bill.

By using offsets, such as raising the rates on companies that incorporate offshore to avoid U.S. taxes, Grassley will mark up a bill Thursday that makes room for Bush’s dividend proposal while technically staying within the $350 billion limit he pledged to Republican moderates he would maintain.

One of them, Sen. Olympia Snowe (R-Maine), called Grassley’s plan a “gimmick.”

And Daschle wasted no time in offering a counterproposal.

Senate Democrats would spend $152 billion over 10 years to jumpstart the lagging economy, which has lost 2.7 million jobs in the past two years.

Daschle’s plan would offer adults a $300 “wage credit” in addition to increasing the child tax credit and speeding up reduction of the so-called marriage penalty.

“These tax cuts will save a family of four making $50,000 a year $1,630 on their taxes this year,” Daschle said.

While Grassley told reporters he is confident his bill would pass, saying he has never marked up a bill he didn’t have the votes for, Senate Republican Conference Chairman Rick Santorum (Pa.) and Vice Chairwoman Kay Bailey Hutchison (Texas) belied his claim by imploring the busloads of citizens at their rally to go out and lobby their Members to support the GOP plan.

On the House side, Democrats blasted Ways and Means Chairman Bill Thomas’ (R-Calif.) $550 billion plan just hours before the committee began marking it up.

“Incredibly, the House Republican leadership is putting forward today a massive tax cut that is even worse than the president’s plan and will continue to take us in the wrong direction,” House Minority Leader Nancy Pelosi (D-Calif.) said.

House Democrats introduced their own job-growth package in January, but Pelosi said they are prepared to unveil another economic stimulus proposal to counter Thomas’ plan. She gave few details.

Ways and Means ranking member Charlie Rangel (D-N.Y.) chided Thomas for marking up his bill so quickly while also not allowing Democrats to offer amendments.

“They are so disciplined,” Rangel said of the GOP, adding that Republicans won’t let an alternative come to the floor because they are “wedded” to Bush’s outline.

“The president really has no economic policy,” said Rep. Robert Matsui (Calif.), Democratic Congressional Campaign Committee chairman and senior Ways and Means member. “It’s just a series of tax cuts.”

Thomas’ plan would reduce taxes on dividends, but not totally eliminate them, and cut the capital gains rate.

“The House Republican plan is not fair — the majority of its benefits go to the wealthiest 5 percent of Americans,” Pelosi said.

Democrats charge that none of the Republican plans would create jobs, help middle-class families or give relief to states awash in debt.

“The Office of Management and Budget, the Congressional Budget Office, [Federal Reserve Chairman Alan] Greenspan — they’re all their people and they disagree” that Bush’s plan would do much to stimulate the economy, Rangel said.

Daschle’s plan would give states $32 billion this year. Pelosi said the House proposal would be similar.

The two Democratic bills could easily be reconciled in a conference committee, Rangel said, acknowledging that the likelihood of both alternatives passing is slim.

Senate Majority Leader Bill Frist (R-Tenn.) maintained that the embattled dividend proposal — the centerpiece of Bush’s economic growth plan — is the best way to boost the economy.

“That is the way to go,” Frist said.

Daschle countered: “They call their tax cut ‘robust’; in fact, it’s just a bust.”

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