Print

Mail

wiki links

Lawmakers weigh booster shots to US economy

President George W. Bush and congressional leaders agree the US economy needs a significant shot in the arm to help it recover from the shock of the Sept. 11 hijack attacks, but are far from agreement on what medicine to prescribe.

Lawmakers on Thursday began pushing their favorite ideas for economic stimulus after Bush announced on Wednesday he would like a package of about US$60 billion to US$75 billion. Federal Reserve Chairman Alan Greenspan has also given lawmakers his blessing for such a plan.

Bush discussed the package with Republican Senators on Thursday at a White House meeting that also included Treasury Secretary Paul O'Neill. The secretary also met with congressional tax and budget writers as part of an effort to sift through the various proposals and write a package that the White House and a majority of Democrats and Republicans in the House of Representatives and Senate can support.

Republicans are leaning toward a package of tax cuts aimed at spurring business investment, while Democrats say the plan should include spending measures as well as tax cuts balanced between businesses and consumers.

"Our hope is that we can find the proper balance between spending and tax cuts and that within tax cuts, that we find the proper balance between investment incentives or commitments to expenditures, perhaps through expensing [of business equipment purchases] as well as consumptive encouragement on the part of individual consumers," said Senate Majority Leader Tom Daschle, a South Dakota Democrat.

A group of House Republicans urged fellow lawmakers to concentrate the package on tax measures that would "retain or create more jobs for Americans."

Specifically they said they wanted to accelerate individual rate cuts called for in the US$1.3 trillion 10-year tax cut Bush signed into law, allow businesses to write off purchases of computers and other equipment faster, repeal the corporate alternative minimum tax (AMT), which companies say discourages investment in a slow economy, and lower the tax on gains from the sale of stock and other assets.

The package is likely to include some breaks for businesses, including accelerated depreciation of equipment. It also could include AMT relief, a much cheaper alternative for the federal treasury than reducing the corporate income tax as some business groups have urged. It may also include provisions that will make it easier for businesses to write off losses.
This story has been viewed 1669 times.