Jack Kemp Urges the Administration to Stop Negotiating With Itself on the Economic Stimulus Package

In response to recent wire service stories reporting that Treasury Secretary Paul O’Neill was dispatched to Capitol Hill today with a new “compromise” stimulus package, Empower America co-director Jack Kemp made the following statement:

“This new ‘compromise’ stimulus package the Administration is proposing only gives big-spending, tax-cut opponents in the Daschle wing of the Democratic Party still more concessions, while receiving no apparent concessions in exchange. It’s not surprising that Senator Daschle is unwilling to compromise, because in moving prematurely to offer up further concessions the Administration has signaled that it believes it must have a deal no matter how much it must concede. In response to the Administration’s new offer, Senate Democratic Leader Daschle said that such a proposal contained ‘the makings of a deal’ but only if Republicans drop their plan to accelerate income tax rate cuts in favor of a one month holiday from the Social Security payroll tax.

“It should be clear to everyone that Senator Daschle is prepared to continue raising the ante on President Bush until the Administration demonstrates that it is perfectly willing to take no bill rather than sign a bad bill into law.

“The Administration is, in my opinion, rushing in prematurely with a third compromise that will only whet Senator Daschle’s appetite for more Republican concessions rather than produce a willingness to compromise. The Administration’s first compromise came in early October when the President agreed to send a letter to Capitol Hill requesting an increase in discretionary spending almost three times what he felt necessary, which the Democrats accepted and promptly demanded more. The second Administration compromise came with President Bush’s first stimulus package proposal, which did not reflect the President’s most preferred policies but rather attempted to ‘pre-negotiate’ a deal that Administration officials convinced themselves the Daschle wing of the Democratic Party would accept. Wrong again. Daschle ‘moderates’ demanded no acceleration of the tax rate reductions enacted this summer while the radical element of the Daschle wing (e.g., Senator Hillary Rodham Clinton) demanded that taxes be raised by delaying the tax rate reductions.

“Now is the time for the Administration to keep its powder dry. The President laid down his plan and the House has passed its bill. The next step is up to Senate Majority Leader Tom Daschle. It is incumbent on him to put together a package that can pass the Senate. The time for the President to enter negotiations is after both Houses have passed bills, not before. Until the Administration recognizes this fact, every good-faith compromise offer it makes will be met with demands from Democrats for more concessions.”