Senate completes watered-down sends recession relief bill, sends to president

<br><br>WASHINGTON (AP) _ The Senate passed and sent to President Bush Friday a recession relief package extending jobless benefits and providing billions of dollars in business tax cuts. Bush called it

Friday, March 8th 2002, 12:00 am

By: News On 6

WASHINGTON (AP) _ The Senate passed and sent to President Bush Friday a recession relief package extending jobless benefits and providing billions of dollars in business tax cuts. Bush called it ``a very good bill'' even though it is far less than he wanted.

The final vote for approval was 85-9 and came a day after the bill cleared the House by 417-3. The swift action followed months of partisan gridlock that saw three previous House-passed versions blocked in the Senate.

``The unemployed and struggling businesses have had to wait too long for the good news,'' said Sen. Charles Grassley of Iowa, ranking Republican on the Senate Finance Committee.

Bush did not get several major elements he wanted, including accelerated income tax cuts, a new round of rebate checks, repeal of the corporate alternative minimum tax or a tax credit to help the jobless buy health insurance. But the president said he was eager to sign it into law.

``We've had too much nonmovement on this important issue, and it's time to go,'' Bush said Thursday.

The bill, said Senate Majority Leader Tom Daschle, is ``very similar to what we have introduced and supported and voted for and advocated.''

The Senate vote came a day after Federal Reserve Chairman Alan Greenspan presented a more upbeat economic forecast than he had a week earlier. Given the size of the U.S. economy, Greenspan told the Senate Banking Committee, the relatively modest stimulus package would have little impact on recession recovery.

``I doubt very much that the economy, if it didn't get a stimulus, would sag,'' Greenspan said.

The Senate Budget Committee chairman, Sen. Kent Conrad, D-N.D., said those comments illustrate how difficult it is for Congress to act on recession relief.

``Every single time we've tried to do it, we've moved too late,'' he said.

Others complained that some of the business tax cuts would cost states $14.6 billion over the next three years, because many states base their corporate tax structures on the federal system.

``It will no doubt be hurtful to the states,'' said Sen. Jay Rockefeller, D-W.Va.

Proponents, however, said it would aid sectors of the economy that need it, including manufacturing and high-tech companies.

Bush pronounced it ``a very good bill,'' one that ``has got some economic stimulus as a major part of it.''

The legislation would pump $51 billion into the economy this year, $43 billion next year and $29 billion in 2004, congressional analysts say. Its cost over 10 years is about $42 billion, because some tax breaks would generate government revenue in later years.

The measure would extend regular 26-week jobless benefits by 13 weeks and allow for additional automatic extensions in states with high unemployment rates.

Many lawmakers were nervous in an election year about failing to act on lengthening the benefits before Monday, six months since the Sept. 11 attacks that worsened the economic slide. Daschle said about 1.6 million people have seen their unemployment benefits expire since the attacks.

For businesses, the measure provides an immediate 30 percent depreciation write-off over each of the next three years for new investments, and a more generous way to deduct losses from taxes paid in previous years. The depreciation change in particular would right away spur business activity and enable companies to hire more workers, supporters said.

``It forces people to do it now if they're going to get the benefit,'' said Martin Regalia, chief economist at the U.S. Chamber of Commerce.

The bill creates a ``Liberty Zone'' in the lower Manhattan section of New York in which $5 billion in various tax breaks would be available over 10 years to help the city recover from September's attacks. In addition, the bill would extend a list of popular tax breaks, most for two years, that have expired or will expire this year.

Despite the lopsided House vote, Democrats and Republicans traded charges over who was to blame for the bickering that stalled a compromise for five months.

Democrats contended House GOP leaders capitulated under pressure, finally dropping such contested proposals as accelerated income tax cuts and repeal of the corporate alternative minimum tax.

``This is a hardheaded lot we have here in the House leadership,'' said House Democratic leader Dick Gephardt of Missouri. ``They are always out of step with everybody else on what is moderate and sensible and reasonable to do.''

House Speaker Dennis Hastert, R-Ill., told reporters it was Republican persistence that overcame inaction by Daschle and Senate Democrats.

``We did not back up, we did not wave a white flag or retreat,'' the speaker said.

Nine Democratic senators voted against the bill: Robert Byrd and Rockefeller of West Virginia; Tom Carper of Delaware; Kent Conrad of North Dakota; Mark Dayton of Minnesota; Christopher Dodd of Connecticut; Russell Feingold of Wisconsin; Carl Levin of Michigan; and Ernest Hollings of South Carolina.

Not voting were: Sens. John Breaux, D-La.; Mike Enzi, R-Wyo.; Edward M. Kennedy, D-Mass.; Barbara Mikulski, D-Md.; Zell Miller, D-Ga.; and Daniel Inouye, D-Hawaii.