- The Washington Times - Sunday, September 30, 2001

There is strong bipartisan support between Congress and the White House for an emergency stimulus package to get the economy growing again.
Business representatives who have attended private White House briefings seeking to forge a consensus on a stimulus plan say that the administration is considering a wide range of tax cuts to get money immediately into the hands of businesses and consumers to pull the economy out of the steep plunge precipitated by the Sept. 11 terrorist attacks.
"We want to develop a plan that is easily understood, will boost consumer and business confidence and that can be implemented very quickly," said Dorothy Coleman, vice president for tax policy at the National Association of Manufacturers (NAM).
Over the past two weeks, the administration has been dealing with "the supply-side effects" of the attacks, reopening the financial markets and getting the airlines up and running "and all that is necessary to rebuild the infrastructure," said White House economist Larry Lindsey.
"The other question is what effect has this had on consumer confidence and the demand side of the economy, and that's something the stimulus plan will address. There's a desire here and in the Congress to move expeditiously on it," he said.
Mr. Lindsey does not attempt to underestimate the severity of the economy's weaknesses, though he is not ready yet to use the word recession. "The numbers are very close to zero. Are we in a recession now? I don't know. We clearly hit bottom in the second quarter," he said.
The Commerce Department said Friday that the economy grew at a tiny 0.3 percent rate between April and June, and Federal Reserve Chairman Alan Greenspan said that the economy stopped breathing after the terrorist attacks. More than 90,000 layoffs were announced in the wake of those attacks, so the third quarter is not expected to be any better; in fact, it is expected to be much worse.
"Millions of American businesses find themselves struggling to keep their doors open and their workers employed," said NAM President Jerry Jasinowski.
"We urge the administration and Congress to act quickly on tax measures that will raise business and consumer income with modest impact on the overall budget," he said.
Commerce Secretary Donald L. Evans said last week in an interview with The Washington Times that the stimulus plan could be about 1 percent, that is around $100 billion, of the nation's gross domestic product. That is the minimum stimulus needed to have an expansionary impact on the economy, Mr. Greenspan testified last week.
The stimulus plan was being designed to get "more money into the hands of the American people and the private sector," Mr. Evans said.
To that end, the NAM is calling for accelerating the individual tax rate cuts that Congress passed earlier this year by shortening the phase-in by two years, cutting corporate tax rates by 5 percent, and repealing the corporate alternative minimum tax.
Meantime, a behind-the-scenes movement is under way to build congressional support among conservative lawmakers for cutting the capital gains tax, an idea Mr. Lindsey and others in the administration oppose.
A letter will be circulated this week among Republican senators and congressmen by the Club for Growth, a pro-tax cut advocacy group headed by Stephen Moore, who is urging them to insist that a capital gains tax cut must be part of any stimulus package that passes Congress.

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