US Congress Finally Ready To Agree Stimulus Bill

by Mike Godfrey, Tax-News.com, Washington

08 March 2002

The US House of Representatives yesterday approved the latest version of the econonomic stimulus bill that the administration has been trying to get through Congress for the last three months, voting 417-3 in favor of a $51bn bill that gives a 13-week extension of unemployment benefits plus a number of technology-oriented corporate tax breaks.

The administration praised the House bill. "I urge the Senate to immediately pass this bill and get it to the president's desk for his signature," said Treasury Secretary Paul O'Neill. Senate Democrats said the package looked fine to them and a spokeswoman for Senate Majority Leader Tom Daschle (Dem., S.D.) said a vote could come as soon as this morning.

Tax provisions in the House bill include a three-year, 30% bonus write-off for new capital investments; a temporary extension to five years, from the current two, of the period that companies can carry back net operating losses; and several tax incentives for investing in lower Manhattan in New York City.

The bill also would renew temporary tax breaks that expired at the end of last year, including a five-year extension of a popular provision exempting from taxes certain income for multinational financial-services companies and insurance firms.

Senate Democrats took credit for the bill, saying that House Republicans were forced to pare down three previous stimulus packages because of steadfast objections from Democrats in the narrowly divided Senate. "This is basically the package I proposed a couple of months ago," Mr. Daschle said.

House Republicans, along with Mr. Bush, would have preferred a stronger stimulus package with more individual and business tax relief, but promised to continue passing tax bills throughout the year, including legislation to make permanent last year's repeal of the estate tax.

The House vote coincided with a Senate Banking Committee appearance by Federal Reserve Chairman Alan Greenspan, who said the bill would have little impact on the economy. "I doubt very much that the economy, if it didn't get a stimulus, would sag," Mr. Greenspan said.

Senate Minority Leader Trent Lott (R - Miss.) said that economic stimulus legislation should have passed months ago, and said at a press conference: "We may not need as much (stimulus) as we needed earlier."

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