By Alan K. Ota, CQ Staff

A rare push by both parties to agree on a way to stimulate the economy has triggered a lobbying frenzy.

K Street lobbyists and trade and industry groups know they have little time to make big gains with the fast-moving measure, which has tentatively been slated for completion within a month.

Lawmakers have face-to-face talks with President Bush on Tuesday about the possible shape of a stimulus package.

Tax Stmulus Ideas: Click here to view the chart

Lobbyists are working behind the scenes to promote their ideas to key players in the decision-making process.

Among their targets are top aides and advisers to House Speaker Nancy Pelosi , D-Calif.; Majority Leader Steny H. Hoyer , D-Md.; and Minority Leader John A. Boehner , R-Ohio.

Another crucial opportunity for salesmanship is with Keith Hennessey, director of the National Economic Council.

A onetime aide to former Majority Leader Senate Trent Lott, R-Miss. (1989-2007), Hennessey worked on the 2001 tax law (PL 107-16) and the 2002 economic stimulus (PL 107-147).

Hoyer said he has made his office accessible to business groups to hear their concerns, and advisers to Pelosi said she, too, has been in close contact with a range of economists and business leaders.

“I haven’t heard a bad idea since this started,” said House Ways and Means Chairman Charles B. Rangel , a Democrat from New York.

Whatever changes to the tax code are made in the name of economic stimulus, he said, “At the end of the day, the question is going to be is it temporary, is it timely, is it targeted and is it to going to get there?”

Corporate Wish List

The National Association of Manufacturers has been pushing for an accelerated, or bonus, depreciation — similar to a 2003 tax law provision (PL 108-27) — that would allow companies to deduct 50 percent of business investments in 2008.

Other advocates, including Grover Norquist, president of Americans for Tax Reform, have called for reducing the corporate tax rate from 35 percent to 25 percent.

High-tech companies and manufacturers want an extension of the research-and-development tax credit that expired at the end of 2007.

Tracy Mullin, president of the National Retail Federation, took the lead in promoting a rebate, or rebate-like measure, that would get money into the hands of taxpayers immediately, so they could buy consumer goods.

“Quick enactment of legislation to put dollars back in the consumers’ pockets would fuel consumer spending and create additional demands throughout all sectors of the nation’s economy,” she said in a letter to Bush.

Some lobbyists said they believed a potential centerpiece of the package would be a rebate-like proposal to eliminate the 10-percent tax bracket on the first $8,000 of taxable income, amounting to approximately $800 for an individual, or $1,600 for a couple.

That approach was considered less cumbersome for the Internal Revenue Service to administer as it enters the peak tax season. It would mirror a similar provision in the 2001 tax law (PL 107-16) that was enacted in June of that year and produced checks that were delivered in August.

Committee chairmen and rank-and-file members are pushing their own proposals.

Transportation and Infrastructure Chairman James L. Oberstar , a Democrat from Minnesota, has called for $15 billion in funding for infrastructure such as water projects, echoing calls by some business leaders, including Thomas J. Donohue, the president and chief executive officer of the U.S. Chamber of Commerce.

“Funding for any kind of construction would be good,’’ Donohue said.

Artur Davis , D-Ala., has argued for providing cash to states to address Medicaid shortfalls.

Jerry McNerney , D-Calif., one of a number of endangered Democratic freshmen, has pushed for tax breaks for producers of alternative energy.

Debating the Details

All sides want to move quickly to try to give the economy a jolt as worries grow about unemployment, consumer spending and the ripple effects of the downturn in the housing market. This has brought about a rare show of bipartisanship, but the details of any package could prove tricky and complicate getting something done soon.

For instance, although both sides have embraced the idea of tax rebates, who exactly should get one has yet to be decided. Democrats are discussing ways to focus more benefits on low- and middle-income families by capping the gross income of potential beneficiaries.

In 2001, rebates of $300 for individuals and $600 for households went only to those who paid income tax. Democrats may want to have checks sent to low-income Americans who pay payroll taxes, for Social Security and Medicare, but not income taxes. Republicans strongly oppose such “refundable” tax breaks.

Some Democrats also favor enhancements of unemployment benefits or food stamps, ideas some GOP leaders have also dismissed.

Bush’s Opening Bid

In a Jan. 18 speech, Bush emphasized the need to provide a balanced package of tax breaks for consumers and for businesses.

He also echoed Democratic demands that the stimulus be one-time or short-lived measures — all but taking off the table efforts to make permanent the tax breaks for businesses and families that he pushed through Congress in 2001 and 2003. Democrats have made clear they would strongly oppose using the stimulus plan to extend those tax cuts.

“This growth package must be temporary and take effect right away so we can get help to our economy when it needs it most,” Bush said. “And this growth package must not include any tax increases.”

In addition to “direct and rapid income tax relief for the American people,” he called for a package of “tax incentives for American businesses, including small businesses, to make major investments in their enterprises this year” in order to promote the creation of jobs.

Dirk Van Dongen, a leader of the Tax Relief Coalition on K Street that helped to push the president’s tax cuts through Congress, said that his group is preparing to put its full weight behind a bipartisan stimulus measure, even though individual members are divided on which tax cuts would provide the biggest jolt to the economy.

His group has made clear there is only one likely deal breaker: the addition of tax increases to pay for the package.

“I think there is a good chance they will reach agreement. If not, I think both parties will retreat to political rhetoric in context of November [elections],” said Van Dongen, president of the National Association of Wholesaler-Distributors.

David Clarke contributed to this story.

First posted Jan. 18, 2008 7:23 p.m.

Correction
Corrects spelling of Tracy Mullin's name.