The Wall Street Journal didn’t even blush when it said, “The biggest element of the economic stimulus package that President Bush signed into law Saturday [March 9] offers businesses a lucrative tax break.”
The measure, the fourth version of a package tossed back and forth between the House and Senate, cleared the House by a 417-3 margin on March 7 and 85-9 in the Senate a day later, provides for tax breaks amounting to nearly $97 billion from 2002 to 2004, seven times the $14.4 cost to extending unemployment benefits to the millions of laid off workers who have exhausted their regular benefits.
The legislation makes it marginally easier for states to adopt their own benefit extension that could add as much as 26 weeks of extended benefits to unemployed worker, with three states, Washington, Oregon and Alaska already providing extended unemployment benefits.
When it became obvious that a deal had been cut, AFL-CIO President John Sweeney, said the 13-million member federation was “profoundly disappointed” over failure of the Congress to increase benefit levels or relax eligibility standards that deny benefits to some 60 percent of workers who have lost their jobs.
In a March 7 statement Sweeney said the measure would add an additional $15 billion to the already-existing shortfall faced by states because of the economic slowdown. Moreover, proposals to assist workers with health care costs or to send a $300 tax rebate to those who did not receive a rebate last summer, fell by the wayside.
The Center for Budget and Policy Priorities (CBPP) echoed the AFL-CIO’s criticism of the legislation, and called media reports that it was a “dramatic compromise” with a tilt toward the unemployed an “inaccurate characterization.”
“The measure represents an important step forward,” the CBPP said, “but the lion’s share consists of multi-year tax cuts favoring business.”
Labor economists doubt the effect the $145 billion package – $51 billion in 2002 and $94 billion in 2003 – will have as an economic stimulant for two reasons: It falls far short of the $200 billion called for in the stimulus package offered by the Congressional Progressive Caucus last fall and, second, its tax provisions, most of which apply after 2002 will do little to get the wheels of industry turning in the immediate future.
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