The End Of Unity

By Karen Tumulty/Washington

The most important economic policymaking council in Washington these days may well be the private and informal one that has convened twice lately around the conference table in House Speaker Dennis Hastert's suite in the Capitol. The faces at the table include four other congressional leaders of both parties, White House economic adviser Larry Lindsey, Bill Clinton's Treasury Secretary Robert Rubin and Federal Reserve Chairman Alan Greenspan. When they first met, eight days after the Sept. 11 terrorist attacks, Greenspan cautioned the group not to rush to revive the economy until they had time to measure the full effect of the tragedy. But last Wednesday, participants told TIME, the Fed chief brought a different message to the table. "We've learned a lot in two weeks," he said. With consumer spending sinking in nearly every sector but auto sales and movie tickets, he added, it was time for Congress to act--even though that would mean putting the government in the red for the first time in five years.

Greenspan's shift provided the green light lawmakers had been waiting for. Already the outlines of the economic stimulus package are clear. The White House and leaders of both parties have agreed with Greenspan's assessment that new spending and tax cuts should total about 1% of the country's annual income, that it should make its effects felt quickly and that it should not threaten to balloon the deficit so much down the road that it immediately raises long-term interest rates. But once you get past the parameters and into the particulars, the two parties in Congress don't seem to be in accord on anything.

Maybe it's a sign that Washington, like the rest of the country, is beginning to get back to normal. While the two parties acted more like one in the first weeks after the terrorist bombing--speedily authorizing Bush to use force, passing $40 billion in emergency disaster relief, approving a $15 billion bailout for airlines--last week they were back to their old bickering. Senate majority leader Tom Daschle branded the Republicans "obstructionist" for their opposition to airport-security legislation. Attorney General John Ashcroft and Senate Judiciary Committee chairman Patrick Leahy blamed each other for holding up antiterrorism legislation. And House Ways and Means chairman Bill Thomas abruptly postponed a vote in his committee on giving the President new authority to negotiate trade agreements, when it became clear it had inflamed the Democrats. Even some who had normally favored open trade accused the Republicans of opportunism--using a national crisis to push through a priority.

Partisan differences are not necessarily a bad thing. "Bipartisanship is abnormal," House Democratic leader Dick Gephardt says. "We all come here representing different people with different viewpoints, and a big part of our job is to express those viewpoints on the floor of the House."

Nowhere are those differences more deeply felt than on the question of how to put the economy on its feet. The divisions boil down to classic party philosophy: Republicans want most of the roughly $75 billion to be spent on tax cuts for businesses and individuals. Democrats say the benefits should go largely to those hurt most in a downturn, both in tax cuts to lower- and middle-income Americans and direct aid to the unemployed.

Rank-and-file lawmakers of both parties believe there have been far too many deals coming out of cozy bipartisan sessions like the meeting last week in Hastert's office. "House Republicans and House Democrats are both gagging on this," says G.O.P. strategist Ed Gillespie. Liberals in the House are livid Gephardt agreed to a bailout, promoted by Republican Senate minority leader Trent Lott among others, that helped airline shareholders without doing anything for laid-off workers. And conservatives went into revolt when Hastert nearly signed on to the idea of making 20,000 airport security workers federal employees. "Both Gephardt and Hastert are catching hell from their caucuses, and it's not going to get any better," says Democratic Congressman Charlie Rangel, who faults the "so-called leaders" with compromising principle in the interest of speed.

Nor are conservative Republicans any happier with Bush, who has jettisoned some of their more ambitious stimulus proposals, such as cuts in capital gains and corporate tax rates, in hopes of reaching an accord with Democrats. "We're back to triangulation," chortled a congressional Democratic aide, referring to Clinton's technique of cutting deals with the opposition. "The Republicans aren't used to it, and they don't like it." And they said as much to Bush in a testy session Thursday night at the White House. Influential House Republicans, led by majority leader Dick Armey and whip Tom DeLay, the second- and third-ranking Republicans in the House, groused that it was time for Bush to pay more attention to their concerns and less to those of Daschle.

A senior White House official dismissed the criticism as coming from "outliers who have a hard time accepting bipartisan cooperation," but the President clearly got the message. On Friday, Bush sounded newly combative as he stood with Vice President Dick Cheney and Treasury Secretary Paul O'Neill in the Rose Garden and declared, "In order to stimulate the economy, Congress doesn't need to spend any more money. What they need to do is cut taxes." But he also indicated that some reductions should go to low- and moderate-income workers--a key Democratic demand.

While self-righteousness is on the rise on Capitol Hill, polls indicate that the public has little stomach for partisan maneuvering at a time of national crisis, which may be why congressional leaders are increasingly hopeful that the next order of business after a stimulus package will be the one act of Congress that can end all the conflict: a resolution to adjourn for the year.

--With reporting by James Carney, Viveca Novak and Douglas Waller/Washington

With reporting by JAMES CARNEY, VIVECA NOVAK AND DOUGLAS WALLER/WASHINGTON