WASHINGTON (Dec. 24, 2001)—Congress adjourned for the holidays Dec. 21 without the Senate acting on the Bush administration's economic stimulus package.
Congressional Republicans and their industry supporters insisted that the package—which would cost the federal government $90 billion its first year and $218 billion over five years—was necessary to jump-start the economy after the current downturn and the catastrophic events of Sept. 11.
But Senate Democrats, led by Majority Leader Tom Daschle, D-S.D., claimed the bill would only cause the federal deficit to soar and would grant tax breaks to the rich while offering relatively little help to the middle class and poor. Mr. Daschle indicated, however, that Democrats might be willing to reopen the economic stimulus issue early next year.
Among other things, the legislation offered significant reform of both the corporate and individual alternative minimum tax; a 30-percent depreciation on qualified capital investments put in service over the following three years; and a two-year extension of tax provisions that expired Dec. 31.
One of these tax provisions, heavily favored by the Tire Association of North America and the International Tire and Rubber Association, is the Work Opportunity Tax Credit, under which small businesses can take a tax credit on first-year wages for new hires from various underprivileged minorities.
The House passed the stimulus package in the wee hours of Dec. 20 by a 224-193 vote. By that evening, Mr. Daschle had declared the bill dead.
“It's time for everyone to move forward and get a stimulus package through Congress,” said Donald B. Shea, president of the Rubber Manufacturers Association, regarding the measure's failure. “We may be missing an opportunity.”