Pelosi Wants Tax Cuts In New Stimulus Plan

by Leroy Baker, Tax-News.com, New York

11 November 2008

Rep. Nancy Pelosi (D - Calif.), the Speaker of the House of Representatives, wants Congress and the Bush administration to consider a new economic stimulus package as a prelude to wider economic revival legislation next year, which could contain tax cuts.

With new employment data showing that the number of jobless rose by another 240,000 in October, Pelosi is urging President Bush to back another round of stimulus legislation worth about USD80bn which could be passed by Congress in the weeks before the hand-over to president-elect Barack Obama.

“Today's announcement that America has lost more than 1m jobs this year underscores what working families already know: the Congress and the Bush Administration must take swift action to boost the economy, create jobs and help struggling Americans," Pelosi said in a statement on Friday.

“The House has already passed strong economic recovery and job creation legislation in September. Today’s economic news should send a clear signal to Republicans in the Senate and to President Bush that they must join us in an effort leading economists agree is critical."

Pelosi told the Wall Street Journal last week that any stimulus package passed during the 'lame duck' session of Congress this month would represent a "down payment" on a larger, package which could be passed in the early weeks of Obama's presidency. She said that this second package should contain actual tax cuts rather than rebates because they could be put into workers' paychecks straight away and would therefore feed through to the economy much faster. More rebates, while welcome, would take too long to administer and distribute to taxpayers, she argued.

However, Pelosi dismissed calls from Republicans for permanent cuts in capital gains and other taxes, adding that longer-term action on tax should be considered as part of "tax simplification" legislation.

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