The $75 billion plan comes in addition to the $40 billion emergency fund for New York and Washington, and the $15 billion bailout for the airline industry. The total cost of the president’s stimulus proposals now tops $115 billion.
Weekly jobless claims rose for a second week to 528,000 from 457,000 on Sept. 21. Jobless figures have not been this high since a 539,000 peak in July, 1992, during the last recession. Labor Department analysts project the unemployment rate for September will be around 5 percent, up .1 per cent from August.
More than 200,000 layoffs have been announced since the attacks, most notably in the tourism and travel industries, and by businesses in New York City.
President Bush pledged $3 billion in emergency grants to cover unemployment benefits and insurance for those laid off because of the attacks.
Prior to Sept. 11, the Bush administration favored a much smaller stimulus package of tax cuts for people who pay income taxes.
Senate Majority Leader Tom Daschle (D-S.D.) said he told Bush the proposals seemed fine, but cautioned: “I’m not sure that it covers all of the different needs we have with regard to people who fall through the cracks.”
Some Republicans, however, expressed dismay over the administration’s new plan since their initial recommendations to cut capital gains tax and reduce corporate income tax rate were dropped from the bill.
“Some of us that are friends of this administration . . . are very concerned that we’re going to wind up with a big package that in large part will be not stimulative at all,” Senate Finance Committee member Sen. Fred D. Thompson (R-Tenn.) Said
Sen. Phil Gramm (R-Tex.) of the Senate Finance Committee added, “These are all the same old ideas that were rejected in the last tax package, primarily giving tax cuts to people who do not pay taxes.”
Federal Reserve Chairman Alan Greenspan, former Treasury Secretary Robert Rubin, and Lawrence Lindsey, who advised President Bush, met with congressional leaders to urge them to pass a package totalling $60 to $75 billion.
Chairman Greenspan, who typically advocates more conservative measures, noted that a large stimulus program was necessary in the short-term but should not extend beyond one or two years.
President Bush and congressional leaders have already agreed to a $686 billion budget for the 2002 fiscal year, which began Monday, and an additional $25 billion for military, education, and emergency spending.
On Monday, the Senate also approved most of President Bush’s $345 billion defense spending bill and another bill to increase financial assistance for firefighters.
None of the emergency stimulus spending is included in the 2002 fiscal year budget.