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U.S. Economy On The Rise, Bush Signs Stimulus Bill
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U.S. President George W. Bush |
WASHINGTON, March 9 (IslamOnline and News Agencies) - Congress Friday gave final approval to a bill extending unemployment benefits and giving modest business tax breaks sought by the battered high-tech industry in a vastly scaled-back economic stimulus measure.
The Senate approved the measure 85-9 a day after a 417-3 vote in the House of Representatives, sending it to the White House for the president's signature.
The bill is estimated to pump as much as $94 billion into the economy over five years; but because it also raises some revenues, the cost over 10 years is estimated at $42 billion.
President George W. Bush, who has argued that a stimulus bill was needed despite signs of economic recovery, pledged to sign the measure and White House officials signed the bill on Saturday, March 9.
“This measure will mean more job opportunities for workers in all parts of our country, Bush said today in the White House Rose Garden, where he officially signed the bill into law at 10:15 A.M. E.S.T.
He also went on to say that the bill is specifically designed to provide relief for small businesses in New York, which suffered greatly as a result of the September 11 attacks.
The legislation was stripped of contentious accelerated income tax cuts and corporate tax incentives in earlier stimulus proposals, but extends unemployment benefits and includes some limited business tax breaks.
Lawmakers were under pressure to pass such a measure with thousands of people, who lost their jobs as a result of the September 11 attacks, scheduled to lose unemployment benefits after six months.
Also included in the bill were measures sought by the battered high-tech industry, allowing a "carry-back" of losses for five years and faster depreciation write-offs for some investments.
Backers say the move will help stimulate investment, particularly in information technology, which has been in a deep slump.
"With IT [Information Technology] spending growth in the U.S. barely registering a blip on the economic radar screen, this action is a much needed shot in the arm," said Harris Miller, president of the Information Technology Association of America.
"Provisions of the bill will allow buyers of IT to depreciate those assets more quickly in line with the actual useful life of those investments. We think this change will help motivate IT customers to pull the wraps off their capital spending budgets and jump-start IT projects which have been delayed, deferred or cancelled."
The bill also includes some tax relief for New York City to help its recovery from the September 11 attacks that destroyed the World Trade Center towers and caused a massive shock to the economy.
Congress had been deadlocked for months on a stimulus plan aimed at helping the economy pull out of recession.
Ironically, Congress finally ended the gridlock and passed the measure amid evidence the recession is over and the economy is growing at a faster-than-expected pace.
The government surprised analysts Friday, saying the jobless rate fell slightly to 5.5% in February, as payrolls expanded by 66,000; earlier reports showed the U.S. economy grew at a surprising 1.4 percent pace in the fourth quarter and that the manufacturing slump is over.
Though many economists and Federal Reserve Chairman, Alan Greenspan, have said the stimulus is not needed, the White House and others have continued to press for passage, saying it is needed to assist the recovery and to aid those put out of work in recent months.
Thomas Donohue, president of the U.S. Chamber of Commerce, hailed passage of the bill saying it would "help make sure that the US economy gains momentum up a growth curve."
But there were also many critics of the measure: some said it was not enough for low-wage workers, others said the business breaks were not big enough.
State governors complained that the business tax breaks will indirectly cut into state tax receipts, which are linked to the national tax code.
Ray Scheppach, executive director of the National Governors Association, said the bill would cost the U.S. 14.7 billion over the next three years and "there was no fiscal relief to states."
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