CHN: Senate Committee Narrowly Passes Economic Stimulus Bill
Partisan Differences Set Stage for Floor Fight
On Thursday, November 8, the Senate Finance Committee passed its version of an economic stimulus bill by an 11 to 10 vote. Vermont Independent James Jeffords joined Democrats in approving the measure, the Economic Recovery and Assistance for American Workers Act of 2001. Committee action on the bill came a few weeks after the House passed its $100 billion stimulus bill (HR 3090) by a razor-thin 216 to 214 margin. The House measure has been widely criticized for favoring tax breaks for corporations and the wealthy while ignoring the needs of moderate and low-income Americans and providing little in the way of actual stimulus.
The $67 billion Senate bill, sponsored by Finance Committee Chairman Max Baucus (D-MT), is more evenly divided between new spending and tax cuts. Insistent that Congress address the growing needs of laid-off workers – whose ranks have swelled over the last few months – Senator Baucus’ bill calls for temporary expansions to the Unemployment Insurance Program. These provisions include an extension of unemployment benefits by 13 weeks, expanded eligibility to part-time and recently hired workers, and increased minimum weekly benefits.
The Baucus bill also seeks to provide temporary health care coverage to uninsured displaced workers. The measure includes a 75% federal subsidy for COBRA health insurance for laid-off workers. It would also expand Medicaid eligibility for one year to those not eligible for COBRA. Altogether, the measure would provide about $26 billion in unemployment insurance and health care benefits for workers who have lost their jobs.
Like the House bill, the Senate measure would also provide tax rebates to low-income Americans who did not earn enough to receive rebate checks under the $1.35 trillion tax cut bill passed earlier this year. The measure also includes tax breaks for the families of victims of the September 11 terrorist attacks. In addition, the bill would provide certain temporary tax breaks for corporations, including incentives for businesses to invest in areas in New York devastated by the attacks.
The business tax cuts under the Baucus plan total about $22 billion, far less than the $70 billion in corporate subsidies contained in the House package. Senate Majority Leader Tom Daschle (D-SD) appears to be standing firm against many of the corporate tax cuts contained in the House-passed bill and favored by the President. For example, Daschle adamantly opposes accelerating cuts in individual tax rates now scheduled for 2006, and has ruled out a repeal of the corporate minimum tax.
While Democrats have lambasted the House bill for its corporate giveaways, the Senate package is being hammered by Republicans for providing assistance to various special interests, including the sugar beet and bison meat industries. Agriculture aid – $3 billion in fiscal year 2002, and $5.5 billion through 2011 – was included in the measure to help secure the support of certain Democrats. The Senate package also contains $9 billion in tax credit bonds for Amtrak, $2 billion of which would fund a new tunnel under the Hudson River into New York.
Partisan divisions over these and other issues are setting the stage for an intense floor debate in the Senate. Further complicating the debate, when the bill reaches the floor, Senator Robert Byrd (D-WV) may attempt to include an additional $20 billion for infrastructure spending aimed at bolstering national security. President Bush has stated that he will veto any measure that goes beyond the $40 billion already allocated to respond to the terrorist attacks.
The Finance Committee bill could come to the Senate floor as early as Tuesday, November 13. Republicans will likely raise a point of order against the measure, in which case 60 votes would be needed to overcome this procedural hurdle and pass the bill. President Bush has called on Congress to pass a stimulus bill by the end of November.