Posted on 01/06/2003 6:43:26 PM PST by arete
President Bush (news - web sites) will ask Congress to give unemployed Americans up to $3,000 to pay for their job searches — and reward them for finding work — as part of an economic revival package that will also cut taxes for 92 million people, the White House said Monday.
"The president really is investing $600 billion on an old, old Republican theory of trickle down economics," said Rep. George Miller (news, bio, voting record), D-Calif. "We're saying no. Give it to the people who need it."
With both parties jockeying for political gain, Democratic lawmakers unveiled their economic stimulus package one day before the president travels to Chicago to outline his plans.
The Democratic plan would give all workers a refundable income tax rebate of up to $300 per person or $600 per working couple and offer business tax breaks.
The White House said 92 million taxpayers would get an average tax cut of $1,083 this year under Bush's plan — a $600 billion mix of accelerated income tax cuts, child tax credits, business investment incentives, help for the unemployed and the centerpiece proposal to eliminate taxes on corporate dividends.
"The critics haven't seen the plan," Bush said after a Cabinet meeting. "This is a plan that provides tax relief to the working citizens. It's a plan that is a very fair plan. It's a plan that recognizes when somebody has more of their own money, they're likely to spend it, which creates more jobs."
Word of the Bush's plans to eliminate taxes on stock dividends helped spur the Dow to an increase of more than 170 points.
In a rare note of agreement, both the White House and Democratic congressional leaders pledged to extend unemployment benefits. Democrats, however, criticized Bush for not prodding GOP lawmakers to extend the benefits last year.
After tackling that issue, Bush wants Congress to create "re-employment accounts" of up to $3,000 that could be used by states in a variety of ways — including rewarding bonuses to people who quickly leave unemployment rolls.
Under the two-year, $3.6 billion plan, people who have exhausted their unemployment insurance or are likely to do so would be able to draw from the accounts to pay for child care, job training, transportation, moving costs and other expenses of finding a job, senior White House officials said.
A person who lands a job in 13 weeks would be able to keep any money left over in their account, the officials said.
The officials, who spoke on condition of anonymity, said 60 percent of the bonus money would go to the person when they get a new job. The rest will be awarded after six months on the job.
The $3.6 billion will divided among states based on their levels of unemployed.
The program is designed to give people incentive to find jobs as quickly as possible, White House officials said, adding that Bush's policy team believes that some Americans rely too heavily and too long on unemployment benefits.
Democrats said their package quickly boosts the economy, gives tax relief to middle-class Americans and does not expand the federal deficit — points on which they said Bush's plan will fail.
"This Democratic plan stimulates, the president's plan procrastinates," said Democratic Caucus Chairman Robert Menendez.
Democrats want to double the amount of investments — from $25,000 to $50,000 — that small businesses can claim as a deduction on their income taxes. They would expand a bonus program for businesses who make large investments, but would require them to make the purchases this year.
Under the Democratic plan, states would get $31 billion for homeland security, highway, Medicaid and unemployment insurance programs.
The package would cost $136 billion this year. The first-year cost of Bush's 10-year plan was unclear.
Bush's plan to eliminate taxes on stock profits would accounts for about half of the package's $600 billion price tag.
He said the current tax on dividends is unfair because the stock gains are taxed twice — once at the corporate level as profits and a second time as dividend income to shareholders.
"That's bad public policy," he told reporters after a Cabinet meeting.
Bush said the proposal will increase investment and help the growing number of Americans, including a large number of senior citizens, who benefit from stock dividends.
Democrats, however, said the plan is aimed at the wealthiest Americans.
"Most Americans who have investments in the stock market have it through their IRA or their 401K so that is tax-free anyway," said House Democratic leader Nancy Pelosi of California.
The Urban Institute-Brookings Institution Tax Policy Center estimates that 41 percent of the benefits would go to the elderly but most of that would go to wealthy retirees. Only 6 percent of the benefits would go to elderly people with incomes below $50,000.
White House officials, speaking on condition of anonymity, said Bush's plan would:
_Speed up rate reductions scheduled to take hold in 2004 and 2006.
_Expand the child credit to $1,000 next year from the current $600, a change that is now scheduled to gradually take place over the decade.
_Accelerate the planned reduction on the marriage penalty.
_Create "re-employment accounts" that would provide help pay expenses for finding word, such as transportation. child care. of looking of work. Once they find job, they can keep additional funds to create incentive to find a job.
$3,000 in a re-emplyment account is not nearly enough. It should be at least $5,000 and sent directly to anyone who is unemployed.
Richard W.
Richard W.
Stupid idea IMO. Just reduce taxes for everyone. Why not reward the ones who are working?!
So far, the entire burden of producing an economic recovery has been placed solely, and unfairly I might add, on the shoulders of the middle and upper classes. It is everyone's responsiblity and obligation to participate and being poor and/or unemployed cannot be accepted as an excuse.
I would take President Bush's plan a step further and go ahead and create a Dept. of Homeland Recovery which would be a cabinet level position. There are hundreds of easy ways we can get the unemployed and poor to do their part in the recovery effort once we put our minds to it. I have three good ideas myself without even breaking a sweat.
1. We could offer rebates on inexpensive wines from NY and CA to help them with their state deficits. If you buy a bottle of wine costing $7.00 or less, you get a $3.00 rebate and the Fed picks up the difference.
2. We could revisit midnight basketball except the players get paid. Say everyone that shows up automatically gets $25.00 and if you actually play you get $50.00. Not only would this cut down on neighborhood crime, but it would spur sales at local area mom and pop businesses.
3. We can safely assume that everyone has at least one or two TV's but probably if unemployed, have trouble being able to afford cable or satellite services. I think that the Fed should pick up half the cost of providing those services to the umemployed because when you are unemployed you have a lot of time on your hands and TV provides inexpensive entertainment.
See, three good ideas without even trying.
Richard W.
Huh?
I think that maybe you've missed the point. Let's get in the spirit here.
Richard W.
How about the Fed buys up millions of lotto tickets and includes 3 tickets at no charge with every unemployment check. It would be fun for and give much needed hope to the unemployed. It would also help state deficits. The kicker is that we then get to tax the winners and use that money to defer the costs of the midnight basketball program. Everyone is a winner.
Richard W.
Nice rant. That's only one side of the coin, though. Now that the gifts are opened, let's go to the donut shop and be served by people from the Dominican Republic. Let's call about returning that sweater...someone from India answers; I wonder if they know that programmer who replaced Uncle Alf at the tech company. Who's that shoveling the snow? Why it's a Mexican immigrant...all the American kids are too busy staring at the computer games. Should be a nice party this afternoon. That nice bioresearcher from China, musician from Hungary, computer analyst from Turkey, and doctor from Korea should be there.
The only way money is going to help is if it's to send home non-citizens, illegal (and legal whenever possible), close our borders, and set up a program to bring the jobs back home.
It isn't about searching for jobs. It's tight out there. What does the administration think? That money is the reason people can't find job? I'm thinking they know the money will be spent on travel, clothes, etc. that will boost consumer spending. It's just another print money for a consumer who isn't spending enough scheme.
We're fighting a war for the hearts and minds of the American people. Cost should not be a consideration and everyone should jump on board and back the President's plan. Rewarding the unemployed with a few dollars is a small price to pay to show everyone just how compassionate we are. We need to make being jobless and poor attractive or at least not unattractive.
Richard W.
2. We could revisit midnight basketball except the players get paid. Say everyone that shows up automatically gets $25.00 and if you actually play you get $50.00. Not only would this cut down on neighborhood crime, but it would spur sales at local area mom and pop businesses.
3. We can safely assume that everyone has at least one or two TV's but probably if unemployed, have trouble being able to afford cable or satellite services. I think that the Fed should pick up half the cost of providing those services to the umemployed because when you are unemployed you have a lot of time on your hands and TV provides inexpensive entertainment.
Great ideas that could really spur this economy.
Hey Rabbit, good to hear from you. As far as a new growth/economic stimulus package goes, I have a few other good ideas that I'm working on but have to iron out a few details. I think that the unemployed can be taught to day trade the stock market and for the price of a new computer, cable modem fees and maybe a $20,000 stake to get them started in the market, they could all be working (trading) within 6 mths. Unemployment would drop to zero and the stock market would zoom up with all the new money. It is another win win idea that could benefit the American economy and get the unemployed to carry their fair share of the recovery burden.
Stay safe!
Richard W.
Well, if you want tax money, you are going to have to get yourself unemployed first. That would be the surest and fasted way to a tax break.
Richard W.
Who's playing make believe? I got news for you bucko, there ain't nothin about me that's remotely intellectual which is exactly why my ideas are a sure fire way to prosperity and happiness. So we have to give up a few freedoms and become dependent on more big government, isn't it worth it? We NEED government to show us the right way and don't you ever forget it.
Richard W.
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