WASHINGTON — Americans may soon be getting another tax-rebate check as part of a new government effort to jolt the stalled U.S. economy.
The proposal — one of several ideas for stimulating economic activity — is gaining momentum in closed-door talks between the Bush administration and Congress. Although no final decisions have been made, President Bush and congressional leaders are edging closer to a bipartisan stimulus plan that could be unveiled as soon as next week.
The package is also likely to include financial help for unemployed airline workers and others who have lost jobs as a result of the Sept. 11 terrorist attacks. Most estimates put the total cost at about $50 billion — on top of the $40 billion in emergency spending that Congress approved shortly after the attacks and the $5 billion bailout for the airline industry.
"The president is looking at options," said White House spokesman Ari Fleischer. "There are a lot of people in this country who are hurting, who are out of jobs and who need help."
The growing consensus on the need for economic action is a direct result of the Sept. 11 attacks, which triggered thousands of layoffs, sent the stock market tumbling, battered consumer confidence and dealt a crippling blow to travel and tourism businesses. Many economists think that the shock waves from the terrorist assaults will tip the already sluggish economy into recession.
"The near-term outlook for the U.S. economy is bad. It could become very bad," said George Perry, an economist at the Brookings Institution, a centrist think tank.
Bush and congressional leaders from both parties will resume their talks over breakfast at the White House on Tuesday.
"We need to do it together, if at all possible," said House Democratic Leader Richard Gephardt of Missouri.
Ideas under discussion include:
Another round of tax rebates. Democrats are uniting behind a plan that would send tax rebates of about $300 to the roughly 29 million low-income workers who make so little money that they do not have to pay income taxes. These low-income workers did not qualify for the tax rebates that the Internal Revenue Service recently mailed out.
Supporters contend that another round of rebates would be the quickest way to pump more money into the economy because low-income workers tend to live from paycheck to paycheck and spend any money they receive.
"That money will be spent and spent quickly," said Gene Sperling, who served as President Clinton's chief economic adviser.
Even opponents of the idea agree that some version of it is likely to be included in any stimulus package, if only because Democrats are likely to insist on it.
"This kind of legislation is not drafted in heaven. It's going to be a marriage of Democratic and Republican ideas," said Bruce Josten, head of governmental affairs for the U.S. Chamber of Commerce.
Business tax breaks. Republicans insist that any stimulus package should include provisions to encourage business investment, but there is no agreement on details. One idea gaining favor would let companies accelerate tax write-offs for new equipment and other expenditures.
Lawrence Lindsey, Bush's chief economic adviser, advocates a cut in corporate tax rates, in the belief that businesses would spend the savings on new equipment, better technology or other improvements that would create jobs and improve productivity. The Chamber of Commerce also backs the idea.
Opponents say that the proposal offers little to small businesses and would increase the likelihood of deficits by reducing government revenues.
A cut in capital gains taxes. Republicans and some conservative Democrats have long favored reducing the tax on profits from stocks and other investments, but even supporters acknowledge that the proposal is not likely to appear in any stimulus package.
Federal Reserve chairman Alan Greenspan helped kill it by telling lawmakers in a recent closed meeting that cutting the capital gains tax would have little immediate effect. Dramatic declines in the stock market have also raised questions about whether there will be any profits to tax.
"There will be no capital gains tax cut as a part of this," said former Rep. Bill Frenzel, a Republican from Minnesota who long served on the tax-writing Ways and Means Committee and is now a guest scholar at Brookings.
Unemployment assistance. Bush and congressional Democrats agree that the stimulus plan should help workers who have been hard hit by the economic fallout from the terrorist attack; the only question is how to do it.
The Bush administration wants to keep any assistance targeted at workers who have been most directly affected; some Democrats want a more generous program.
A $3 billion package proposed by Democrats would provide immediate unemployment benefits to workers who are not now eligible, extend the duration of benefits after the current six-month deadline and subsidize health insurance.
A $31 billion proposal being circulated by Sen. Edward Kennedy, D-Mass., would help all workers affected by the slumping economy.
Spending. Government spending on programs that create jobs has long been a tonic for economic woes, and it isn't just Democrats who support the idea. The Chamber of Commerce and other business groups want to tap into the highway and aviation trust funds to accelerate work on highways, airports, bridges and other infrastructure.
Some members of Congress want more spending on high-speed rail service, anticipating that fear of flying will encourage more train travel.