Editorial: Pick right economic stimulus

Tuesday, Nov. 6, 2001 | 8:37 a.m.

Last week the Labor Department announced that more than 400,000 Americans lost their jobs in October -- the largest one-month drop since 1980. Las Vegas, like other tourism-based cities, has been stung sharply. It's estimated that as many as 15,000 Las Vegans, most of them hotel-casino employees, have lost their jobs since the Sept. 11 terrorist attacks. Business slowly has started to pick up again, but the economy needs a lift now. A Republican-drafted economic stimulus package that recently passed the House won't do much for laid-off workers or the economy -- although it could do wonders for some corporations.

The House bill offers $100 billion in tax breaks, with $70 billion going to businesses. Amending the alternative minimum tax code, a retroactive change going back five years, would offer a huge payout for some corporations. For instance, IBM would get a $1.4 billion refund and General Motors would receive $833 million back under the GOP plan. But economists have noted that the GOP's plan likely won't produce the kind of incentives that would propel businesses to invest their money to create more jobs, especially if people aren't buying their products or using their services now.

Democrats who control the Senate are considering a $70 billion package that they believe offers the best salve for the economy. The Democrats are proposing modest tax breaks for businesses of $20 billion, and they also want to cut taxes by $14 billion for low- and middle-income people. The Democratic plan would seek to get money into the hands of all Americans so that a real spark would be created to get the economy going again, boosting consumer confidence along the way. The Democrats also want to set aside more funding for public works projects, a shift that would create more jobs and aid the economy. In addition, Senate Democrats want to boost unemployment benefits and offer some health insurance coverage for laid-off workers, which would cost $33 billion.

It's important to cushion the blow for workers who have been laid off. At the same time we need to provide more money for the people who actually will spend it so that businesses will get stronger and then hire back their laid-off workers. An economic stimulus bill should help everyone in the economy, not offer needless tax breaks for the wealthy and big corporations.

archive