By Juliet Eilperin
The Washington Post
WASHINGTON — Republicans and Democrats ended a long-running debate Thursday over how best to help unemployed workers and revive the economy, as the House passed legislation to extend unemployment insurance and provide billions of dollars in tax breaks for businesses.
Both parties could claim a degree of victory with the bill’s House passage, 417 to 3. Republicans emphasized the $43 billion in tax cuts to spur investment. Democrats — some of whom supported that level of tax relief — said they had averted deeper corporate tax cuts while helping the unemployed.
The compromise package provides up to 13 weeks in additional unemployment benefits, although some recipients would receive less if their state programs ended more quickly. The bill would permit small businesses to write off expenses more quickly; provide tax incentives for investment in New York City to compensate for the Sept. 11 terrorist attacks; and extend several expiring tax breaks, such as one allowing financial services companies to defer tax payments on overseas profits.
Lawmakers were eager to act before next week, which marks the six-month anniversary of the terrorist attacks in New York, the Pentagon and Pennsylvania. By that point, 1.6 million Americans will have exhausted their unemployment benefits.
"The time for debate is over," said House Ways and Means Committee Chairman Bill Thomas, R-Calif. "The time for passage is now."
Senate Majority Leader Tom Daschle, D-S.D., has endorsed the measure, and the Senate could pass it as early as Friday. President Bush praised the legislation, telling reporters at the White House: "It’s a bill that not only takes cares of unemployed workers, it is a bill that has got some economic stimulus as a major part of it. … I look forward to signing it."
Despite such praise, the stimulus package is a shadow of the deeply ambitious proposals the two parties once envisioned. Republicans gave up hopes for about $100 billion in total tax cuts aimed at spurring corporate investment and job creation. Democrats, meanwhile, backed away from their calls for $300 checks to low-income workers who didn’t qualify for last year’s tax rebate.
The AFL-CIO, usually a stalwart Democratic ally, said it was "profoundly disappointed" that the legislation failed to boost health coverage for the unemployed. The bill "does nothing to help laid-off workers pay the crushing costs of health care," said the labor federation’s president, John Sweeney.
Also unhappy are the nation’s governors. They say the bill would drain their treasuries by allowing businesses, over the next three years, to depreciate 30 percent of the value of new investments made in the first year. Because most states base their corporate income taxes on federal rules, the proposed change could cost them $14.6 billion over the next three years.
Republican Michigan Gov. John Engler and Democratic Kentucky Gov. Paul Patton sent a letter to congressional leaders saying the bill would deprive states of revenue at the a time they are reeling economically. They urged lawmakers to provide federal funds to make up for the shortfall.
But Senate Finance Committee Chairman Max Baucus, D-Mont., who previously had called for relief to the states, said his colleagues were more focused on moving the bill than making fixes.
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