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Speedy relief needed
A Times Editorial
Published January 19, 2008
What is an economic stimulus package to head off recession? That could end up as the answer to a Jeopardy! question under the category Politics: The issue that finally forced Republicans and Democrats to work together during a presidential election year.
Americans shouldn't count their tax rebates until they have them in hand, but it does look as though congressional Republicans and Democrats, President Bush and Federal Reserve Chairman Ben Bernanke are all on the same page, more or less. All realize that you can't afford to turn your back on suffering Americans when the economy is faltering.
On Friday, Bush resisted a demand that Congress include an extension of his prior tax cuts as part of a stimulus package. That signaled hard-core fiscal conservatives in Congress to back down from pushing that agenda. Now Democrats have to make some concessions, particularly by temporarily lifting the Pay-Go requirement that any tax cuts or increased spending be offset with equal tax increases or spending reductions elsewhere, which would defeat the purpose.
There isn't much time to quibble. Delay is actually the biggest obstacle to an effective response to the current economic meltdown. We don't know yet if we're in a severe slowdown or an actual recession, but either way a stimulus that is timely, targeted and temporary will speed recovery.
House Speaker Nancy Pelosi said Congress can have a package together by Jan. 28, when Bush gives his State of the Union speech. Let's hold Congress to that deadline, which would give everyone something to applaud.
As for targeting the relief, the largest amount will likely come in the form of a one-time tax rebate - with amounts of $500 to $800 per person being tossed around. That is a good way to get money into Americans' hands quickly, though the rebate should go mainly to lower and moderate income families, who will put the money back into the economy sooner. Those are also the people suffering the most because of rising unemployment and energy costs.
Other provisions of the expected $100-billion to $150-billion package need to be worked out. Democrats favor putting some of the relief into extended unemployment benefits, which adds a compassion bonus. Republicans would like to see tax relief for businesses included, which makes sense if it spurs job creation. What Congress must avoid is giving in to narrow special interests, who are already lining up to grab a share of the money.
In a crisis, Americans should expect their elected officials to work together for the common good. There will be no acceptable excuse for failing to do so.
[Last modified January 18, 2008, 22:26:45]
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