giving a huge check to companies that cost the tax payers tremendous money. [This package also] disturbs the Social Security and Medicare programs, and other things that ordinary people depend on in the name of having some ultimate trickle-down effect somewhere down the road that no one’s sure of.”
BIG TICKET ITEM
The package comes with a price tag, perhaps a hefty one once the bill comes in from military action in Afghanistan — costing the United States some $1 billion to $2.2 billion in its first two months alone, according to The Center for Strategic and Budgetary Assessments, a nonpartisan research group. “The so-called surplus is gone and, yes, it could end up putting us a little more into a deficit,” according to Conrad. “From the point of fiscal policy, this is the time for deficit spending. The idea is that you should do deficit spending during recessions and run surpluses during periods of economic growth.”
Some business leaders are also skeptical of the plan. “You have to put the stimulus out to where it’s going to be reinvested [into the economy] and put money into the hands of those who are going to spend it,” says William G. Mays, president and CEO of Mays Chemical Co. Inc. in Indianapolis (No. 18 on the 2001 BE INDUSTRIAL/SERVICE 100 list with $172 million in sales). “It’s like the [Ronald] Reagan philosophy: a rising tide lifts all ships. Well, that’s fine if you have a boat in the water.”
A SNOWBALL’S CHANCE?
The grim outlook for the package is where both parties agree. “I think it looks very dim right now,” says Rep. J.C. Watts Jr. (R-Okla.), the chairman of the House Republican Conference. “And I’m saddened by that considering we lost about 700,000 jobs in the last two-and-a-half months.”
The sad fact is that following September 11, there was an overwhelming sense of patriotism where Americans stood behind their elected officials. Washington, D.C., with its public support, could have run with the ball and accomplished whatever needed doing, serving their constituents. Instead, they fumbled while time was running out. This is the 10th recession in the United States since the end of World War II. Each has lasted an average of 11 months, according to the National Bureau of Economic Research in Cambridge, Massachusetts. If this recession — which economists say began in March 2001 — follows that pattern, simple mathematics shows that any aid coming out of Washington, D.C., could be a day late and a dollar short.
Stimulus Plan Highlights*
Provide $300 (single), $500 (head of household), or $600 (couples) tax rebates to individuals who filed U.S. tax returns in 2000, but did not qualify for a full rebate check last summer.
Reduces current 27.5% tax rate to 25%, effective January 1, 2002.
Provides up to 13 weeks of extended benefits available in any state for those who became unemployed after March 15, 2001 (approximate start of recession) and who exhaust their regular benefits.
BUSINESS TAX PROVISIONS
Allows a taxpayer to claim an additional first-year depreciation deduction equal to 30% of