Tags: Huge | Stimulus | Package | Reportedly | Imminent

Huge Stimulus Package Reportedly Imminent

Friday, 28 September 2001 12:00 AM

The package would include an extension of unemployment benefits to those laid off after the Sept. 11 terror attacks against New York and Washington - possibly by as much as six months. Another element being considered is a payroll tax cut for those Americans that do not earn enough to have qualified for a tax cut rebate check - millions of which were mailed earlier this year to taxpayers as part of President Bush's tax cut.

Payroll taxes, like FICA, are levied on all wage earners, even those who do not earn enough to pay income tax. Payroll taxes fund Social Security and Medicare.

Twenty-nine million Americans, who got nothing from the IRS, could benefit from a payroll tax cut by as much as $600, said the staffer. And some lawmakers are hopeful that - if the cut is passed - these families and individuals might receive a check before the Holidays.

The chairman of the Senate Finance Committee, Max Baucus, D-Mont., is taking the lead in putting the package together, and Federal Reserve Chairman Alan Greenspan and former Treasury Secretary Robert Rubin are playing a significant role behind the scenes, say other Hill sources.

Earlier this week in a private meeting with senators, Rubin and Greenspan said an economic stimulus package worth as much as $100 billion would be an appropriate benchmark to aid the struggling U.S. economy, lawmakers said. Greenspan and Rubin agreed that any stimulus package Congress passes should be large enough to have the intended effect - 1 percent of gross domestic product, or about $100 billion.

The Democratic staffer also said a capital gains tax cut - supported by many Republicans in Congress - would face stiff opposition from Democrats who would try to get it excluded from the package. The Democratic leadership in the Senate and Baucus - a noted Democrat moderate - will work with their Republican and House counterparts to come up with a bipartisan plan. Major disagreements are still likely to arise over corporate tax relief, which could slow down the process of getting a stimulus package through Congress. Congress already approved an emergency spending package of $40 billion immediately after the Sept. 11 attacks on New York and Washington, and $15 billion in bailout aid for the U.S. airline industry.

"Because people have forgotten it or don't know about it, there may be a psychological need to do more," the ranking Republican on the Senate Finance Committee, Sen. Chuck Grassley, R-Iowa, said at the time.

Treasury Secretary Paul O'Neill is scheduled to testify before the Senate Finance Committee next week, and expectations are that he will address the issue for the Bush administration.

Copyright 2001 by United Press International. All rights reserved.

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The package would include an extension of unemployment benefits to those laid off after the Sept. 11 terror attacks against New York and Washington - possibly by as much as six months. Another element being considered is a payroll tax cut for those Americans that do not...
Huge,Stimulus,Package,Reportedly,Imminent
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2001-00-28
Friday, 28 September 2001 12:00 AM
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