House Passes Revised Economic Stimulus Bill

After giving up on bipartisan House/Senate negotiations on an economic stimulus package, the Administration and House Republican leadership developed an alternative strategy to pass a bill that could attract the support of a few Democratic centrists in the Senate. The bill passed the House by a 224-193 vote. The tax provisions of the bill include a tax rebate for those who did not qualify for a rebate in the tax legislation passed earlier in the year, a drop in the 27 percent marginal tax rate to 25 percent, a 30 percent first year depreciation write off for the next three years, an increase in the Code Sec. 179 small business expense limit for two years, a extension of the net operating loss carryback to five years for a two-year period, and individual and corporate alternative minimum tax relief in the form of more favorable treatment of depreciation and foreign tax credits. Also included in the bill were New York reconstruction incentives and a package of tax relief for victims of terrorism. Democratic Senate leadership has stated that it intends to ignore the bill because it cannot attract the 60 votes necessary to pass in the Senate, with the possible exception of trying pull out the New York reconstruction incentives and tax relief for victims of terrorism and pass that as a separate bill. Democrats generally criticized the bill for not doing enough for the unemployed while giving big tax breaks to big business. Although President Bush appeared to be still seeking to force a Senate vote on the bill, Senator Daschle declared economic stimulus dead for the year.