Administration opposes passage of H.R. 3090 as reported by the Senate
Finance Committee. The Administration believes that it is crucial
for Congress to quickly pass a stimulus bill that will help get the
economy going again following the terrorist attacks of September 11th.
This bill in its present form will not accomplish this goal.
of providing broad-based tax relief to restore economic growth,
this bill is an assembly of provisions that do not provide immediate
economic stimulus and are not appropriate to this bill. For instance,
$5 billion is set aside for agricultural programs, including payments
for bison meat, and more than $4 billion is directed to tax credit
bonds for Amtrak.
some of the proposals in H.R. 3090 as reported by the Senate Finance
Committee would require at least six months to one year to take
effect due to their unprecedented nature, the need for new Federal
regulations, and the requirement for new health insurance authorizations
from State legislatures. Proposals that effectively start next summer
and purportedly end next winter will neither provide immediate assistance
for displaced workers nor rapid stimulus for the economy. Indeed,
economic growth could suffer substantially as a result of these
provisions. In contrast to the President's proposal to give prompt
aid to displaced workers and provide broad-based tax relief that
will speed their reemployment, this bill's unprecedented expansion
of unemployment insurance and the new health care entitlements would
likely increase unemployment by hundreds of thousands of workers
provisions have one feature in common however: each is likely to
permanently expand the size and scope of the Federal government
and its control over programs, such as unemployment insurance, that
have always been under State purview.
Administration also notes that the proposed expansion of the work
opportunity tax credit is duplicative since the Administration has
decided it will direct $700 million in Community Development Block
Grant (CDBG) funds to New York to aid businesses affected by the
terrorist attacks. The Administration's decision was the result
of consultations with both New York State and city officials.
Administration is opposed to efforts to attach additional discretionary
spending to the bill. The Administration and Congress agreed to
limit discretionary spending to $686 billion and to provide $40
billion for the emergency response to the terrorist attacks. These
funds are more than adequate to meet foreseeable needs. This agreement
should be upheld.
Administration urges the Senate to work together across party lines
to pass a responsible economic stimulus package that will provide
an immediate boost to the economy. The President believes that the
best way to retain and create jobs is through tax relief that improves
incentives to work and invest while restoring consumer and business
confidence. The President has set out the following four principles
for achieving these goals:
accelerating marginal income tax rate reductions to provide more
money for consumers to spend and for entrepreneurs and small businesses
to retain and create more jobs;
giving relief to low and moderate income workers to put more money
back in their pockets;
providing partial expensing to encourage businesses to invest
and make new purchases; and
eliminating the corporate alternative minimum tax, which, if unchecked,
imposes job-killing higher taxes during an economic downturn.
President has also called for swift action to help dislocated workers,
through extensions of unemployment benefits and health care assistance
programs that can be implemented without delay.
the version of H.R. 3090 reported by the Senate Finance Committee,
the President's framework would boost the economy, help displaced
workers get back to work quickly, and create several hundred thousand
more jobs. Accordingly, the Administration urges the Senate to reject
the Finance Committee approach and instead to work in a bipartisan
manner to craft an economic stimulus package that reflects the President's
principles and encompasses provisions that will provide an immediate
and effective stimulus to the Nation's economy.
law that would reduce receipts or increase direct spending is subject
to the pay-as-you-go requirements of the Balanced Budget and Emergency
Deficit Control Act. Accordingly, H.R. 3090, or any substitute amendment
in lieu thereof that would reduce revenues or increase direct spending,
will be subject to the pay-as-you-go requirement. OMB's scoring
estimates are under development. The Administration will work with
Congress to ensure that any unintended sequester of spending does
not occur under current law or the enactment of any other proposals
that meet the President's objectives.