WASHINGTON — The House is set to follow the Senate’s lead today and pass an extension of unemployment insurance benefits expected to inject $7 billion into the economy — the first step in Congress’ effort to stimulate flagging consumer and business spending.
This story first appeared in the January 8, 2003 issue of WWD. Subscribe Today.
The extension covers almost 800,000 jobless who exhausted state benefits late last month and another 2.5 million whose state support runs out between now and June 1.
The Senate approved the extension Tuesday as its first business in a new Congress where Republicans have majority control of both chambers.
The protest foreshadowed what’s widely expected to be a bitter fight over competing views between the parties about how to jump-start the economy.
“We are leaving over 1 million people who have absolutely no recourse because their benefits have expired,” said Senate Minority Leader Tom Daschle (D., S.D.), who earlier in the day made a surprise announcement that he was no longer considering a run in 2004 for president.
Extending unemployment benefits is part of the GOP’s 10-year, $674 billion economic stimulus plan proposed by President Bush Tuesday, as well as the congressional Democrats’ $136 billion plan offered the day before that, which focuses just on 2003.
Bush was set to deliver a televised address on the economy last night, when he was also expected to underscore the White House’s contention that the economy has only hit a soft spot and that its underlying health is strong.
Bush’s plan calls for eliminating investor taxes on dividends and speeding up income tax cuts enacted in 2001, which would benefit 92 million people. The proposal also increases by $400 the per-child tax deduction, which is now $600.
The tax cuts in 2003 would amount to just under $200 billion. The White House estimates that the President’s plan, which now goes to Congress, would create 2.1 million jobs over three years.
House Democrats on Monday unveiled their stimulus package that includes a $300-per-person or $600-a-couple tax rebate for all workers, an increase in new plant and equipment depreciation for the year and $31 billion in funds to states and locales to spend on homeland security, highways, Medicaid cost and “critical needs.”