the President's Desk...
Stimulus Packages up for Debate in the Senate
an expected vote this week are expected in the Senate for two competing
economic stimulus legislation packages. There are substantial fiscal policy differences
between them, even though both plans are intended to improve the incentives
to work, save, and invest and to ease the impact of the economic recession.
proposed by Senator Charles Grassley (Republican-Iowa) is strongly supported
by President Bush and is similar to the Economic Security and Recovery
Act of 2001 (H.R. 3090 – To view bill, visit http://thomas.loc.gov/cgi-bin/bdquery/z?d107:h.r.03090:)
which narrowly passed the House. (To
view how your representative voted, visit http://clerkweb.house.gov/cgi-bin/vote.exe?year=2001&rollnumber=404) To stimulate economic performance, this measure
relies primarily on modifications in the tax rates, labor and capital.
It will provide incentives for business owners and employees,
stimulate employment growth and generate higher incomes that result
in consumer spending and greater investment (the real catalysts of economic
growth) by reducing tax rates thus reducing the tax burden on investment
and capital assets.
plan, also designed to stimulate economic activity, is the Daschle proposal
(Summary of Economic Stimulus and Assistance for American Workers Act
of 2001 – To view bill, visit http://finance.senate.gov/sitepages/legislation.htm)
which contains a two-component economic stimulus package combining the
plans of Senators Max Baucus (Democrat – Montana) and Robert Byrd (Democrat
– West Virginia). This measure
relies on cash transfer to distressed businesses and displaced workers.
economic outcomes fall short of those expected under the Grassley plan.
The rationale and logic of the plan is questioned because of
the utilization of increased government spending as the primary tool
to stimulate economic activity, although both plans transfer income
to low and moderate income taxpayers through rebates and both assist
the unemployed. The Republican plan however relies less on government spending than
the Democratic plan.
to win specific support from other senators, the Daschle plan includes
provisions less obviously connected to stimulating the economy.
For example, bonding for Amtrak to develop high-speed railroads
and for a new New York-New Jersey tunnel is included in this bill which
was a last minute concession to Senator Robert Torricelli (Democrat
– New Jersey). Also, to help
shore up support of farm state members, more than $5 billion in agriculture
subsidies were provided by the measure. At the request of Senator John D. Rockefeller
(Democrat – West Virginia), a tax credit expanding Internet access in
rural areas was included. In
commodities that have experienced low prices during the 2000-2001 crop
years, subsidiaries are included for bison meat, eggplant, cauliflower,
and pumpkin growers.
As is often
the case with competing legislation in Washington, the Grassley plan
contains several special interest provisions although it has far less
than the Daschle plan.
not perfect and not able to provide immediate economic stimulus as the
economy currently needs, the Grassley bill when compared to the Daschle
measure over the next five years will provide far more incentive for
business to create new jobs, while encouraging families to spend more
and save as it tries to control significant government spending.
how you can become involved, visit http://www.americanvoiceinstitute.org/Stimulus
Packages Action Alerts.htm
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