- The Washington Times - Thursday, September 27, 2001

Lawmakers faced with more news of financial difficulties caused by the Sept. 11 terrorist attacks on the Pentagon and the World Trade Center met yesterday to discuss what they could do to shore up the nation's economy.
While they insist they have not yet decided whether they should act let alone what they should do Sen. Charles E. Grassley, Iowa Republican, said there is "more of a feeling of a need for a stimulus package" to boost the weakening economy.
House Majority Leader Dick Armey, Texas Republican, said earlier in the week, "My view is that we will have a stimulus package before we complete our year's work."
But while there may be growing support on Capitol Hill for doing something to stimulate the economy, there is also mounting concern over the budget for fiscal 2002 especially whether spending levels will remain under control.
"We no longer have a budget," Senate Finance Committee Chairman Max Baucus, Montana Democrat, told reporters yesterday, referring to the massive expenditures and bailouts Congress has already approved. He said the terrorist attacks should not lead Congress to completely abandon the fiscal discipline of recent years.
Senate Majority Leader Tom Daschle, South Dakota Democrat, said Congress needs to be aware of the fiscal situation, "but first we must insist on ensuring that our national security is maintained and protected."
He said there is no doubt that Social Security and Medicare surpluses borrowed in the meantime will be paid back, but "at some point you have to put the fiscal status of your country on a different priority than it was."
The $176 billion surplus for fiscal 2002 predicted just weeks ago by the Congressional Budget Office could have already dwindled to between $40 billion to $60 billion, the CBO told lawmakers this week.
The new CBO projections include a preliminary estimate of the economic impact of the terrorist attacks, the $40 billion in extra spending approved by Congress last week, and a $15 billion airline bailout, according to sources familiar with the CBO's estimate.
Estimates by Democrats on the House Budget Committee show a worst-case scenario of a $15 billion deficit in 2002.
Neither estimate includes the cost of an economic stimulus package.
Federal Reserve Board Chairman Alan Greenspan has said that if Congress decides it needs to help the economy, the package would have to be of "significant size" about 1 percent of the gross domestic product, or approximately $100 billion.
The Federal Reserve later clarified that Mr. Greenspan's calculation includes the emergency spending Congress has already approved meaning an effective stimulus package could include $50 billion in tax and spending provisions to boost the economy.
The bipartisan group of tax-writers and budget committee members said they were impressed by the level of cooperation and consensus in their talks.
That does not mean differences are not cropping up.
For example, Democrats are pushing legislation that would provide financial assistance, training and health care coverage to employees of airlines or other directly affected industries who lose their jobs as a result of the terrorist attacks.
Many Republicans oppose the idea.
Senate Minority Whip Don Nickles, Oklahoma Republican, said Congress does not have to extend unemployment benefits for now. "People have unemployment [benefits] for six months," he said.

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