White House: Stimulus bill 'test of new Senate leadership'

By Major Garrett
CNN Washington Bureau

CRAWFORD, Texas (CNN) -- The debate over an economic stimulus package will be a "test of the new Senate leadership" and its ability to address the nation's severe economic woes, the White House Friday Friday.

"Under the old Senate leadership this would have already happened by now," said White House press secretary Ari Fleischer, referring to Senate Republican control of the Senate. "So this will be a test of the new leadership. It will reflect badly if the Senate is unable to act by the end of the month."

President Bush set a deadline for action on a stimulus bill for the end of November.

"When they come back next week, they need to do it," Fleischer said.

Senate Democrats failed to muster the 60 votes required to thwart the GOP, and the package is stalled in that chamber. The White House cheered the Democrats' defeat.

"The Senate was right to reject what in large measure was nothing more than a Democrat spending proposal," Fleischer said in a statement. "The package fails in its basic purpose to stimulate the economy."

Senate Democrats said the Bush White House needs to pressure House and Senate Republicans negotiate on a bipartisan bill.

"Instead of using choice words against the Senate Democrats, the White House needs to work on Republicans," said Doug Hattaway, spokesman for Senate Majority Leader Tom Daschle, D-South Dakota.

"Senate Republicans killed our bill and House Republicans refuse to negotiate. There's not much we can do under these conditions."

Senate Democrats want to negotiate a stimulus bill made up of tax cuts and new spending. The White House opposes new spending, arguing the president has already agreed to boost spending by $55 billion to address domestic needs in the aftermath of the terrorist attacks.

Republicans want to negotiate a bill of tax cuts, a position the White House supports.

The House passed roughly $100 billion in tax cuts. Democrats contend the package unfairly favors wealthier taxpayers and big corporations. They prefer a package of new spending to bolster homeland security, tax cuts for low- and moderate-income wage earners and expanded unemployment and health-care benefits.

"We're not going to abandon our homeland security legislation to give tax cuts to the wealthy and to profitable corporations," Hattaway said.

Bush has called for roughly $75 billion in tax cuts to stimulate economic growth. Fleischer said many top investment firms have built into their future economic projections the expectation Congress will agree on a stimulus package.