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WASHINGTON — After an urgent call to action from President Obama, the House voted 244 to 188 Wednesday night to pass an $819 billion stimulus package, clearing a major hurdle in his effort to jump-start the economy.
This story first appeared in the January 29, 2009 issue of WWD. Subscribe Today.
Confronting the worst U.S. recession in decades, the plan would provide about $275 billion in tax cuts to workers and businesses and $550 billion for domestic spending programs over two years.
“We don’t have a moment to spare,” Obama said Wednesday after meeting with top business executives at the White House.
The legislation, which got no Republican votes, will next go to the Senate. It is aimed at creating and saving three million to four million jobs by pumping funds into new programs to repair the nation’s aging roads, bridges and highways, as well as alternative energy programs and education initiatives.
Many Republicans oppose the legislation, arguing it is too heavy on government jobs programs and spending and does not provide enough business tax cuts.
A coalition of top companies in the footwear industry, including Payless ShoeSource Inc., The Stride Rite Corp., Wal-Mart Stores Inc., Nike Inc., Columbia Sportswear Co. and Wolverine Worldwide Inc. and leading trade groups appeared headed for a setback in its effort to add a provision to the stimulus package, eliminating $800 million in duties on certain types of lower-priced and children’s footwear.
However, the textile and apparel industry scored a small victory with the adoption of an amendment to require the Transportation Security Administration, a division of the Department of Homeland Security, to buy textile and apparel products made with 100 percent U.S. content that also must be assembled in the U.S.
The House debate on the stimulus plan began after announcements by Caterpillar Inc., Home Depot Inc., Sprint Nextel Corp. and eight other companies on Monday that they would cut more than 75,000 jobs in the U.S. and overseas.
Citing 2.6 million jobs lost last year, House Speaker Nancy Pelosi (D., Calif.) said during the floor debate, “This legislation is long overdue. For all the time that we do not pass it, each month 500,000 Americans will lose their jobs.”
After his session with chief executives, Obama said: “The businesses that are shedding jobs to stay afloat — they cannot afford inaction or delay. The workers who are returning home to tell their husbands and wives and children that they no longer have a job, and all those who live in fear that theirs will be the next job cut — they need help now. They are looking to Washington for action — bold and swift.”
The President has held bipartisan meetings with members of Congress at both the White House and on Capitol Hill, spending political capital trying to win over skeptical Republicans.
“Most of the money we’re investing as part of this plan will get out the door immediately and go directly to job creation, generating or saving three to four million new jobs,” Obama said. “And the vast majority of these jobs will be created in the private sector — because, as these ceos well know, business, not government, is the engine of growth in this country. But even as this plan puts Americans back to work today, it will also make those critical investments in alternative energy and safer roads, better health care and modern schools.”
Democrats dropped a key provision proposed by Obama that would have given a $3,000 tax credit for each new job created by private companies. However, leaders added a provision that had not been promoted by Obama: an expansion and overhaul of trade adjustment assistance, a federal program that provides aid to workers who lose their jobs due to international trade.
The bill expands that program to service workers who lose their jobs and extends coverage to manufacturing workers. Workers would also receive $43 billion for increased unemployment benefits and job training over two years.
On the tax front, the package provides a $500 tax credit for individuals and $1,000 for families. Business tax breaks include an extension of net operating losses to five years to allow businesses to more easily borrow funds, extending a 50 percent bonus depreciation for two years, an extension of small business expensing and expansion of the work opportunity tax credit for unemployed and troubled youth and recently discharged veterans.