House Passes Economic Stimulus — Again

Published February 14, 2002

| Associated Press

For the third time, and probably again in vain, the House on Thursday approved a $150 billion Republican economic stimulus package based on business and individual tax cuts.

Democrats said the bill would go nowhere in the Senate and would delay aid to the jobless.

After blocking two previous GOP stimulus bills, the Democratic-led Senate last week approved a straightforward 13-week extension of unemployment benefits. House Republican leaders, eager to keep recession recovery a high-profile political issue, decided to attach to that a broader package mirroring a bill they passed in December.

"We are going to try, and try, and try," said Rep. Rob Portman, R-Ohio. "Maybe the third time's the charm."

The House passed the bill, endorsed by President Bush, on a 225-199 vote along party lines. Like the GOP's previous efforts, Senate Democrats said it contained too many costly tax cuts aimed at businesses and higher-income people.

"This isn't going anywhere," said Senate Majority Leader Tom Daschle, D-S.D. "I think the Republican leadership should be embarrassed for what they're doing."

Even before the House action, the Senate reaffirmed its support for the 13-week extension of benefits by approving the measure again Thursday on a unanimous voice vote.

Much of Thursday's House debate involved partisan fingerpointing over the failure to agree on a plan to help the economy recover.

Democrats accused the GOP of blindly pushing tax cuts for the well-off rather than helping millions of jobless people continue to receive benefits beyond the 26-week limit.

Rep. George Miller, D-Calif., said the GOP effort was "almost savage in its insensitivity to people who have lost their jobs through no fault of their own."

Democrats said jobless benefits have expired for about 1 million people, with an additional 120,000 figuring to lose them while Congress is on its President's Day recess over the next week.

Republicans countered that the tax cuts would spur job-creating investment, give consumers more money to spend and help New York City recover from the Sept. 11 attacks. Some argued that Democrats prefer to keep the economy in the doldrums so they can use the issue in the November congressional elections.

"There seem to be some people in Washington who would rather have a bad economy because it helps their party in a poll," said Rep. Jack Kingston, R-Ga.

"It's time to get this done. It's time to quit playing political games," said House Speaker Dennis Hastert, R-Ill.

Some fiscal conservatives worried that the bill, whatever its merit, would make the federal budget deficit worse over the next few years, drive up interest costs and force government to borrow even more from Social Security accounts to pay its bills.

"We continue to pile up debt after debt after debt," said Rep. John Tanner, D-Tenn.

The legislation, costing about $150 billion over 11 years, is similar to a stimulus bill passed by the House in December. Highlights and 11-year cost estimates:

--Reducing the 27 percent income tax rate to 25 percent effective in 2002, four years earlier than under current law. Cost: $45 billion.

--Rebate checks of up to $300 for individuals and $600 for married couples who did not qualify for last summer's checks. Cost: $13.7 billion.

--A 13-week extension of unemployment benefits and a tax credit covering up to 60 percent of health insurance premiums paid by laid-off people. Cost: $27.8 billion.

--Bonus depreciation of 30 percent over the next three years for businesses making new investments, such as purchase of equipment. Cost: $12.4 billion over 11 years; $33.5 billion in 2002.

--Several changes in the corporate alternative minimum tax. Cost: $16.1 billion.

--Extension of several expiring tax breaks for two years ($4.3 billion) and extension for five years of a tax break for financial firms operating overseas ($9 billion).

--A package of tax incentives to help revitalize New York City. Cost: $4.9 billion.

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