| Issue
Efforts to pass an economic stimulus bill have broken down
in the Senate. Legislation is needed to jumpstart the sagging
US economy and provide emergency aid to those affected by the
attacks of September 11, especially lower-income workers whose
jobs disappeared.
Act Now
Call your Senators and the White House and urge them to give
priority to stimulus provisions that will help low- and middle-income
people, especially:
- extending Unemployment Insurance benefits;
- providing health care to those who have lost their insurance
along with their jobs;
- giving tax rebates to those who did not benefit from the
2000 tax cut because there incomes were too low.
Background
Even before the September 11 attacks, Congress had begun to
consider proposals designed to reverse the trend toward recession.
The Democrats and Republicans, however, had very different approaches.
President Bush generally supported his party's view, although
he indicated openness to variations of some of the Democratic
plans. The Republican proposal, eventually passed by the House,
relies heavily on corporate tax cuts, while the Democrats prefer
spending to benefit low-income workers. The debate is further
complicated by Democratic insistence on including in any stimulus
package several items that sponsors describe as "homeland
security" measures, but which opponents see as "special
interest" matters.
The Republican bill (HR 3090) passed the House by a razor-thin
margin (216-214). On November 8 the Senate Finance Committee
approved its version of the stimulus measure on an equally close
11-10 vote and sent it to the full Senate, where it promptly
bogged down in partisan bickering.
The Senate bill, priced at $67 billion, would have:
- temporarily expanded the Unemployment Insurance program,
extending benefits to eligible workers who lose their jobs
by 13 weeks and expanded eligibility to part-time and recently
hired workers;
- temporarily provided health coverage to uninsured displaced
workers;
- provided tax rebates to those who did not earn enough to
qualify for the tax rebates given earlier in 2000 (this provision
was also in the House bill);
- given tax benefits to September 11 victims and to some corporations,
especially those that invest in the parts of New York most
affected by the attacks (the House bill contained $70 billion
in such cuts while the Senate measure has only $22 billion);
and
- provided subsidies for the sugar beet and bison meat industries,
added $8.5 billion for agriculture supports, and included
$9 billion in tax credit bonds for Amtrak to improve train
service.
The subsidies have proven highly contentious, as have provisions
added by Senate Appropriations Committee Chair Robert Byrd (D-WV)
for $15 billion in infrastructure repair and other items to
bolster national security. President Bush has said he would
veto any bill that goes beyond the $40 billion already allocated
for national security responses to the September 11 attacks.
Although a bare majority of Senators (51) supported the Finance
committee measure, the Senate has special budget rules that
require 60 votes in support of a non-emergency change in the
budget. The Democrats contended that the response to September
11 should be considered an emergency, but no Republicans supported
that position, so they could not rally the required 60 votes
to bring their bill to the floor. Thus the Senate now has no
bill of its own and must either vote on the corporate benefit-laden
House proposal or come up with a new Senate bill.
Both parties and both houses of Congress have agreed that low-income
workers deserve tax relief. They also agree that Unemployment
Insurance should be temporarily extended, although President
Bush and the congressional Republicans would do that only in
the few states where unemployment has increased by 30% or more
since September 11.
A harder issue may be how to provide health care for laid off
workers. The issue was not addressed by the House bill or the
President's proposal, but there are signs from the White House
that the President is now willing to provide some sort of help
in this area. The Democrats would have the government pay 75%
of insurance costs under the existing COBRA plan, which lets
terminated workers retain their previous coverage for a limited
period at their own expense, or enroll those not eligible for
COBRA in the Medicaid program. The Republican plan would divert
funds from the Child Health Insurance Plan and Labor Department
National Emergency Grants to provide limited health care access.
Given the Senate's failure to take up the Finance Committee's
bill, no further action is expected in the Senate. The next
step is likely to be negotiations by Congressional and Administration
leadership to reach a compromise measure that can be accepted
by Congress and the President.
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