Senate approves jobless benefits bill

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Posted 7:56AM on Saturday, March 9, 2002

WASHINGTON - The Senate voted final approval Friday to a bill lengthening jobless benefits by 13 weeks and providing business with billions of dollars in tax cuts, sending President Bush a package proponents say will make the economic rebound more vigorous. ``This legislation will add momentum so that we have a more robust economic recovery and return to full prosperity,'' said Treasury Secretary Paul O'Neill. The 85-9 Senate vote came less than 24 hours after the House approved the measure by 417-3. President Bush called the legislation ``a very good bill'' and promised to sign it into law. The extension of unemployment benefits would immediately benefit an estimated 1.6 million people who have exhausted their regular 26 weeks of benefits since the Sept. 11 terror attacks. The bill allows for additional automatic 13-week extensions in states where the jobless rate tops 4 percent. A key reason that Republicans and Democrats could reach compromise after five months of gridlock on recession relief is that Monday marks six months since those attacks. In an election year, members of Congress didn't want that day to pass without acting. ``In three days, the people who were laid off in the wake of Sept. 11 will begin exhausting their benefits,'' said Senate Majority Leader Tom Daschle, D-S.D. The level of unemployment benefits varies from state to state but is generally a percentage of a person's prior earnings. Some states also extend benefits on their own. The biggest business provision is a 30 percent immediate depreciation tax break over the next three years, effectively providing a discount for new investments such as equipment purchases made after Sept. 10, 2001. Manufacturers and high-tech companies are prime beneficiaries of the provision, which will reduce government revenue by $96 billion over the three-year period. ``We think this change will help motivate information technology customers to pull the wraps off their capital spending budgets,'' said Harris N. Miller, president of the Information Technology Association of America. Companies also will be able to deduct current-year losses from taxes they paid as far back as five years, up from two years under current law. In addition, the measure renews a range of business tax breaks that expired at the end of last year, including credits for wind energy production, companies that hire former welfare recipients and a break for income earned overseas by financial firms. The bill creates a ``Liberty Zone'' in the lower Manhattan section of New York in which $5 billion in tax breaks will apply over the next 10 years to help the city recover from the attacks. Easy passage of the bill masked some discontent among Republicans and Democrats. For the GOP, the measure does not contain much that Bush asked for in October, including accelerated individual income tax cuts, repeal of the corporate alternative minimum tax, a new round of rebate checks and a tax credit for the jobless to buy health insurance. ``We had greater expectations with more tax cuts,'' said Sen. Kay Bailey Hutchison, R-Texas. Democrats complained that the legislation will make it impossible to balance the federal budget in the next few years and that it will cost financially strapped states $14.6 billion because their business tax systems are tied to the federal one. Sen. Kent Conrad, chairman of the Senate Budget Committee, said these costs will occur even though there is clear evidence that Congress missed its chance to address the recession at its worst. ``Every time we have tried to act on fiscal stimulus, we are too late,'' said Conrad, D-N.D. ``Recovery is already ongoing.'' Conrad was among eight Democrats who voted against the bill. The others were Robert Byrd and Jay Rockefeller of West Virginia; Tom Carper of Delaware; Mark Dayton of Minnesota; Christopher Dodd of Connecticut; Russell Feingold of Wisconsin; and Carl Levin of Michigan. Sen. Lincoln Chafee of Rhode Island was the only Republican in opposition. Not voting were: Sens. John Breaux, D-La.; Mike Enzi, R-Wyo.; Edward M. Kennedy, D-Mass.; Barbara Mikulski, D-Md.; Zell Miller, D-Ga.; and Daniel Inouye, D-Hawaii.