After this Kwame Holman report on the debate over a House plan to stimulate the economy, Gwen Ifill discusses the stimulation plan with two senior members of the Tax-Writing Ways and Means Committee.
KWAME HOLMAN: Members of congress parked their cars on the Capitol's east plaza this morning because all but one congressional office building and adjacent areas remained off limits as environmental checks continued. With the temperature at a record high, some business was conducted. One House member even set up a makeshift office on the plaza, helping make for a livelier scene on the Capitol campus than there's been in days. Leading House members came outside to discuss the main business of the day, competing plans from Republicans and Democrats on how best to invigorate the stagnant national economy.
REP. DENNIS HASTERT, Speaker of the House: The attacks have made consumers and businesses pull back from spending. In light of this situation, Congress and the President must act again to help our economy and to prevent the situation from worsening. We must get our workers back to work and strengthen our businesses so they can continue to be productive and hire more employees. The economy, the economic security package today that we will have on the House floor, will do just that.
KWAME HOLMAN: House Republican Leader Dick Armey predicted a contentious debate over the two parties' differing approaches.
REP. DICK ARMEY, Majority Leader: The debate will be degenerate into class warfare malarkey that, frankly, adds nothing to the value of understanding and contributes nothing to the outcome of jobs in the minds of the American people.
KWAME HOLMAN: Democratic opposition to the Republicans' stimulus plan focuses on a package of tax breaks for businesses. That was clear when floor debate began.
REP. SHERROD BROWN, (D-Ohio): If you're a major corporation, this legislation is for you. But if you are a laid-off worker, if you don't have health insurance, this bill is woefully inadequate. The GOP bill gives damn near everything to many of America's largest corporations.
REP. CLAY SHAW, (R-Fla.): When you start hearing about all of this money going to these corporations and big businesses, that's where the job are. There is a basic difference between the Democrat bill and the Republican bill. The Republican bill believes in the preservation and creation of jobs.
KWAME HOLMAN: The Republican plan aims at providing $160 billion of economic stimulus over the next ten years. Main provisions include decreasing the capital gains tax rate, which will cost the U.S. Treasury $10 billion over ten years; eliminating the corporate alternative minimum tax, which limits corporate tax deductions. That would cost $25 billion. The Republican plan also would make permanent an expiring tax break on income earned overseas by American companies -- $21 billion dollars over ten years; and accelerate the rate at which companies may write off capital purchases. Price tag: $25 billion. House Ways and Means Committee Chairman Bill Thomas argued the plan is balanced, it funds extended unemployment benefit, and gives $14 billion of tax relief to lower income wage earners.
REP. BILL THOMAS, Chairman, Ways & Means Committee: This package assists with a government gift, spending, 40 cents out of a dollar. But it also deals with 60 cents out of every dollar hopping those machines that create jobs so that we can have a gift that keeps on giving.
KWAME HOLMAN: But ranking Ways and Means Democrat Charles Rangel disagreed.
REP. CHARLES RANGEL, (D-N.Y.): Instead of taking care of the people that are displaced, the people that are unemployed, instead of making certain that they are the ones that are supposed to be the ones to spur the economy, you can give billions of dollars to the corporate structure, but if no one is buying cars, if no one is buying washing machines, what are they going to invest in? You've got to be able to create consumer demand.
KWAME HOLMAN: The debate went on as President Bush was talking to workers at a printing plant in Maryland. He largely has stayed out of the stimulus package debate, but once again endorsed the need for one.
PRESIDENT GEORGE W. BUSH: The House is getting ready to vote on that package. I urge them to pass it. And then I urge the Senate to act quickly to make sure that the American people understand that at this part of our homeland defense, our country and the Congress is united.
KWAME HOLMAN: As expected, the Republican majority stimulus plan was approved by the House this afternoon, but by a razor thin margin of 216-214. And the future of the business tax breaks in the bill is very uncertain in the Democrat-controlled Senate.