Rancor Returns to D.C.
By Jeffrey H. Birnbaum

(FORTUNE Magazine) – There's an atmosphere of comity in the nation's capital right now. Pictures of President Bush embracing Senate Majority Leader Tom Daschle, and then reaching literally over an aisle to shake the hand of the NAACP's Kweisi Mfume, are giving the public the impression that the campaign against global terrorism has united lawmakers and changed the tone of debate in D.C.

Behind the scenes, there's a different story. The $40 billion rescue package that Congress passed soon after the attack was delayed until some dissident lawmakers won more control over how the money would be spent. The airline bailout ignited some of the fiercest internal strife the House Democratic Caucus had seen in years. Many Democrats wanted--but failed to get--job protections for employees of the airlines that are set to receive billions in loan guarantees. Says Maryland Congressman Steny Hoyer, a Democratic leader in the House: "We won't have unanimity in every case."

Or in many cases, for that matter. Bigger crackups are coming. Lawmakers will quarrel over how far to curtail our civil liberties in order to ferret out terrorist cells. Republicans will fight Democrats for a missile defense system. And assorted legislators will argue whether the government should completely take over the $1.8-billion-a-year airport baggage system.

But the messiest dispute will be over the most expensive item on the President's new agenda: an economic stimulus package. Almost every tax cut imaginable is on the table. Republicans want to slash corporate levies and, maybe, the capital gains tax. Democrats favor accelerating the just-enacted individual income tax cuts or, more likely, trimming payroll taxes and extending unemployment benefits. Then there are the fiscal conservatives of both parties who are afraid of breaking the bank. Fed Chairman Alan Greenspan is part of this group. He has asked decision-makers to wait before passing new tax relief but will probably support a $100 billion stimulus plan that includes what has already been spent on rescue efforts and the airline bailout.

Any pause will only add to the discord by giving lobbyists time to market their wish lists. The scope of their demands is amazing to behold. Manufacturers would prefer rapid write-offs for equipment. The service sector is angling for corporate rate reductions. Real estate companies want a lower tax rate on profits from the sale of depreciated property. Insurers hope to limit lawsuits against them from terror attacks and to force the government to assume some liability for the Sept. 11 incidents. Hotels and restaurants are seeking federal loans, delays in tax payments, accelerated write-offs for new security equipment, and a promise not to raise the minimum wage. "We're going to be vigilant in opposition to any wage hike; it couldn't be more ill timed," says Lee Culpepper, senior lobbyist for the National Restaurant Association. (The AFL-CIO, of course, takes the opposite view.)

Did you follow all that? As Republicans and Democrats sort their way through this pastiche of requests, they seem to be digging in their heels. New York Congressman Charles Rangel, the top Democrat on the tax-writing Ways and Means Committee, says he has warned House Democratic Leader Dick Gephardt, "You can't raise the American flag and wrap it around all the Republican ideas that existed long before the war."

Indeed, expect much of Washington's backslapping to soon turn into plain old slapping.