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O'Neill Statement Urging Senate to Move Stimulus Package Quickly

NOV. 8, 2001

PO-773

DATED NOV. 8, 2001
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Citations: PO-773
O'NEILL URGES SENATE TO ACT QUICKLY ON A BIPARTISAN ECONOMIC STIMULUS BILL

 

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TREASURY NEWS FROM THE OFFICE OF PUBLIC AFFAIRS

November 8, 2001

Treasury Secretary Paul O'Neill made the following statement on the economic stimulus bill:

[1] On September 17 the President talked about working with Congress to develop an economic stimulus package. In at least 7 major speeches he has repeated this call for action, and on Friday October 5th the President laid out his four principles for an economic stimulus package that would stimulate demand, increase consumer confidence and stimulate business investment.

[2] The President's four principles:

o accelerate marginal income tax rate cuts

 

 

o provide tax relief for low and moderate income workers

 

 

o provide enhanced expensing of capital expenditures

 

 

o eliminate the corporate alternative minimum tax

 

 

[3] I immediately began meeting with bipartisan, bicameral leaders of the tax writing committees. The Ways and Means Committee proceeded to mark up and pass a bill out of committee on October 12th. On Wednesday, October 24th, the House passed H.R. 3090, the Economic Security and Recovery Act of 2001-legislation which meets the President's principles.

[4] It is unfortunate that Senate Finance Committee Chairman Max Baucus has decided to move a partisan product through his committee. The Baucus proposal is heavy on new spending that will have little, if any, stimulative effect on the economy. Moreover, some of its provisions would have an adverse effect on job creation. This is where we are today with the economy:

o REAL GDP declined at a 0.4 percent annual rate in the third

 

quarter -- the first decline since the beginning of 1993 and

 

the largest since a 2.0 percent drop in the first quarter of

 

1991, when the economy was in recession.

 

 

o The UNEMPLOYMENT RATE jumped from 4.9 percent in September to

 

5.4 percent in October, the highest since December 1996, as

 

the full effects of the terrorist attacks hit the labor

 

markets. (September results were collected too early in the

 

month to have been affected.) The October unemployment rate is

 

1.5 percentage points higher than a year earlier, representing

 

the addition of 2.2 million workers to the unemployment rolls

 

during the past year.

 

 

o 415,000 JOBS were slashed from nonfarm payrolls in October,

 

the biggest decline since 1980. A total of nearly 900,000 jobs

 

have been lost since a peak was reached last March.

 

 

o CONSUMER CONFIDENCE tumbled 11.5 points in October on top of a

 

17.0 point fall in September to a 7-1/2 year low, according to

 

the Conference Board. The Michigan consumer sentiment index is

 

at an 8 year low.

 

 

o In response to their pessimistic mood and uncertainty about

 

the future, consumers stayed away from shopping centers and

 

RETAIL SALES fell by 2.4 percent in September, the largest

 

one-month drop since 1987.

 

 

o BUSINESS INVESTMENT plunged at an 11.9 percent annual rate in

 

the third quarter after having fallen at a 14.6 percent pace

 

in the second quarter.

 

 

[5] The President has been clear in his call for quick action on an economic stimulus package to restore confidence and create jobs. It's time to quickly move past this disappointment and get a bipartisan stimulus bill the President can support.
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