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Governors Split on Bush Stimulus Plan

Democratic governors want more financial help for states.

WASHINGTON, D.C. (AP) -- Democratic governors called Thursday for a $50 billion federal economic stimulus plan that would provide temporary tax relief and offer more financial help for states, more assistance for seniors and investments in job creation.

The Democratic Governors Association offered its suggested prescription for the economy in a conference call involving Washington Gov. Gary Locke, DGA chairman; Iowa Gov. Tom Vilsack, the group's vice chairman; and two other governors in the DGA leadership, Ronnie Musgrove of Mississippi and Bill Richardson of New Mexico.

"We want to put resources back in the pockets of America's working families," Vilsack said.

The Democrats criticized President Bush's plan for eliminating taxes on stock dividends. The governors estimated that could cost states several billion dollars because of the effect on state taxes.

Bush is offering a $670 billion mix of accelerated income tax cuts, child tax credits, business investment incentives, help for the unemployed and the centerpiece proposal to eliminate taxes on corporate dividends.

"We have some concerns about the president's plan, about who receives the benefits and the impact on states," Vilsack said.

The Democrats' plan includes:

- Investments in schools and other projects that would create jobs;

- More assistance to workers who have lost jobs;

- Temporary tax relief that spurs consumer spending while having minimal impact on the states; and

- Short-term federal assistance to the states.

The proposal would include a $50-per-month increase in supplemental security income benefits for six months for low-income seniors. It would also extend unemployment benefits for many of those laid off in recent months.

Musgrove said the DGA plan would target help to "rural, inner-city and other underserved communities."

"We cannot have a full economic recovery and assure the security of this country while states are in the middle of the worst economic conditions in a half century," said New Mexico Gov. Bill Richardson.

Democratic governors were unlikely to get much support from Republican governors.

"My critique of [the Democratic proposal] would be that Democrats seem to think that Americans don't need real tax relief," said Colorado Gov. Bill Owens, chairman of the Republican Governors Association. "This is a temporary tax relief that goes away all too quickly."

Owens said the president's tax cuts are not limited to a period of time and would cut everyone's taxes.

Among the many groups offering alternative plans to stimulate the struggling economy are both Democratic governors and Democrats in Congress.

DGA Chairman Locke said the governors in his group are independent of the Democrats in Congress and have a different view of economic solutions.

"We're offering our best analysis of the needs of people," he said.

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