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House Approves Economic Stimulus Package

On December 20, the House approved, 224-193, legislation (H.R. 3529) aimed at reviving the faltering economy.

Sponsored by House Ways and Means Committee Chair Bill Thomas (R-CA), the bill would provide $89.8 billion in FY2002 and $214.2 billion over five years to stimulate the economy. The bill would include a supplemental tax rebate for those who received only a partial tax rebate or no rebate under last spring’s tax cut (P.L. 107-16). Individuals would receive $300 and couples would receive $600. In addition, the measure would reduce the 27 percent tax rate to 25 percent, increase the amount of income that is exempt from the alternative minimum tax for individuals and married couples through 2004, and offer investment incentives for businesses.

The economic stimulus measure also would include health insurance and unemployment benefits. It would provide a temporary 60 percent refundable tax credit for health insurance premiums paid by unemployed workers. The credit would be available for coverage in 2002 and 2003, up to a maximum of 12 months, and could be used to purchase private insurance or COBRA benefits. National emergency grants of $4 billion would be given to states for health care and reemployment assistance for displaced workers, as well as $4.6 billion in grants to states for health care expenses. The bill would provide up to 13 additional weeks of unemployment benefits for workers who became unemployed after March 14, 2001.

This is the second economic stimulus measure the House has approved; the first measure (H.R. 3090) passed, 216-214, on October 24 (see The Source, 10/26/01, p. 1). Disagreement between the White House and Senate Democrats has prevented the Senate from considering the package. It is unlikely that the Senate will consider the bill before adjournment.

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