Bush offers benefits to workers laid off because of attacks

WASHINGTON -- Tens of thousands of Americans who lost their jobs in the aftermath of the terrorist attacks should get longer unemployment benefits and $3 billion in health care, training and other aid, President Bush said Thursday. The White House and Congress debated how to revive the wobbly economy.

"We hear the cries of those who have been laid off," the president said. "We worry about the shock waves throughout the economy."

Bush unveiled his worker relief package amid fresh evidence that the Sept. 11 attacks on New York and Washington had stunned an already sagging economy. The Labor Department said new claims for unemployment benefits rose last week to the highest level in nine years.

Economists expect more bad news Friday when the government releases broad unemployment figures for September. More than 200,000 new layoffs have been announced in the past three weeks.

"People ... are on bended knee," the president told Labor Department employees as he outlined his relief package.

Democrats welcomed Bush's action, but questioned whether it was enough.

"I'm not sure that it covers all of the different needs we have with regard to people who fall through the cracks," said Senate Majority Leader Tom Daschle, D-S.D.

It was the second straight day Bush publicly fretted about the economy. He announced Wednesday that he wants to spend between $60 billion and $75 billion to jump-start the economy, largely with tax cuts.

Advisers said the president is aware that economic anxieties could hurt the nation's morale as he girds for a war on terrorism, and could pose long-term political problems for him.

In a show of bipartisan unity, the Democratic and GOP leaders of the House and Senate budget committees jointly called for quick passage of a stimulus package that would be felt by American within six months.

Under Bush's newest proposal, Americans who have lost their jobs since the attacks would be eligible for a $3 billion program that governors can use in a variety of ways including job training, day care, income supplements and health care premiums.

Bush needs congressional approval for the health care component.

The money would come from the $40 billion Congress has already approved for national recovery.

The president proposed extending unemployment benefits by 13 weeks in states hit hardest by the attacks; most states now cover workers for 26 weeks.

The White House said Congress must approve that extension, which would expire in 18 months. Democratic lawmakers want to extend benefits by more than 50 weeks.

Even as America prepares for war abroad, Bush said, "We will act boldly at home to encourage economic growth. We will take care of people who hurt."

The terrorist attacks have dramatically shifted the landscape of fiscal politics.

Bush, a conservative Republican, is now proposing dramatic increases in government programs while Democrats are warning of looming deficits.

"We will be back in deficits for the first time, and nobody is very proud of that fact or very happy with that realization," said Daschle, explaining why Democrats prefer a $50 billion stimulus package over Bush's larger plan.

Some Republicans are balking at Bush's plans, saying a stimulus package should be all tax cuts and no worker relief.

"A meaningful economic stimulus package must focus on creating opportunity, not expanding government spending," said House Majority Whip Tom DeLay, R-Texas. House Republicans went to the White House on Thursday evening hoping to persuade Bush to back a capital gains cut.

As one tax-cutting option, Treasury Secretary Paul O'Neill suggested accelerating the 1 percentage point reduction in the 27 percent income tax rate that is currently scheduled to occur in 2004, said congressional aides familiar with his meeting with congressional tax writers.

That tax bracket applies to only the highest-earning 24 percent of households, and seemed likely to draw Democratic opposition.

White House and congressional officials, speaking on condition of anonymity, said Bush advisers have privately assured GOP congressional aides that there is no support in the Bush administration for raising the minimum wage as Democrats want.

Bush backed off the minimum wage idea in the face of GOP opposition.

The nation's governors have weighed in, too, asking Bush for more flexibility to spend federal money. Several states were forced to slash budgets even before the attacks.

"The Sept. 11 attacks have shaken consumer confidence and resulted in people staying home, keeping their wallets in their pockets," said Michigan Gov. John Engler, a Republican.

Under Bush's worker-relief plan, people who were working on Sept. 11 and are not eligible for regular unemployment benefits would qualify for the $3 billion grant, and would also be required to enroll in government-run training programs.

The additional 13 weeks of unemployment benefits would be made available to states where joblessness has risen by 30 percent since the end of August. The benefits would also be extended to states in which the president declared a national emergency or major disaster declaration in connection with the attacks.