- The Washington Times - Thursday, September 20, 2001

Federal Reserve Board Chairman Alan Greenspan told congressional leaders yesterday that the economy "froze" during the terrorist attacks on Sept. 11 and that lawmakers considering emergency action should slow down.
Mr. Greenspan, White House chief economic adviser Lawrence Lindsey and former Treasury Secretary Robert Rubin briefed House and Senate leaders privately as lawmakers considered a package of business incentives, such as a cut in capital- gains taxes, to boost the economy.
Congress also is expected to act tomorrow on aid for the ailing airline industry totaling about $17 billion.
Congressional leaders met late yesterday with President Bush as he prepared to address a joint session of Congress tonight on the military response and the nation's recovery.
"We have our work cut out for us," said Senate Majority Leader Tom Daschle, South Dakota Democrat.
Also, Attorney General John Ashcroft visited the Capitol, urging senators to approve broader investigative powers, such as greater wiretapping authority, for the FBI to fight terrorists.
"I think we're going to act in this area quick," said Senate Minority Leader Trent Lott, Mississippi Republican. "Maybe if we'd gotten this done 10 years ago, we wouldn't be in the fix we're in now."
About 50 lawmakers will travel by train to New York today to survey the devastation at the site of the former World Trade Center. Lawmakers yesterday proposed awarding the Purple Heart to civilian casualties in the Pentagon attack, and the Congressional Gold Medal to passengers who overpowered the terrorists on the airliner that crashed in Pennsylvania.
Although lawmakers were making extra efforts to appear united, they had no consensus yesterday on what items to include in an economic recovery package. Some Republicans are seeking to cut the capital-gains tax from 20 percent to 15 percent.
"In all likelihood, we're going to have [economic] figures that will show us into a recession at some point," said Sen. Don Nickles, Oklahoma Republican and assistant minority leader. "The disaster on last Tuesday is going to aggravate that. There are a few things I think we could do that would be very positive, such as a capital-gains reduction."
But Mr. Greenspan urged a cautious approach, and Democrats appeared united against a cut in capital gains.
"I agree with Bob Rubin a capital-gains cut, which would [encourage] the sale of stocks at a time when the stock market is going down, makes very little sense to me," said Sen. Byron L. Dorgan, North Dakota Democrat. "Why would you want to put more downward pressure on the market? I think an investment tax credit would be far more appropriate."
Mr. Greenspan told lawmakers that it will take time to sort out where the economy is headed, said those in attendance. House Speaker J. Dennis Hastert, Illinois Republican, said after the meeting with Mr. Bush that congressional leaders would continue to work on "a prudent plan" but that no total figure had been decided.
On responding to terrorism, Senate Democratic leaders discussed the creation of a working group to address a broad range of issues, from immigration restrictions to cockpit security.
Lawmakers also debated the creation of a national anti-terrorism "czar" in the Cabinet or a similar post at the Justice Department.
"I've had extensive discussions with the attorney general and with members of the administration on the issue," said Sen. Judd Gregg, New Hampshire Republican. "I think they're still thinking through how to best approach it."
Senate Republicans also appeared united in pressing for the administration's energy package, which would open a portion of the Arctic National Wildlife Refuge in Alaska to oil and gas exploration. Mr. Bush has said his plan will make the United States less dependent on foreign sources of oil.

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