Less than two weeks ago, many observers -- including OMB Watch -- were predicting that an end, at least for the foreseeable future, had come for the debate on an economic stimulus package.

Less than two weeks ago, many observers -- including OMB Watch -- were predicting that an end, at least for the foreseeable future, had come for the debate on an economic stimulus package.

Less than two weeks ago, many observers -- including OMB Watch -- were predicting that an end, at least for the foreseeable future, had come for the debate on an economic stimulus package.

Less than two weeks ago, many observers -- including OMB Watch -- were predicting that an end, at least for the foreseeable future, had come for the debate on an economic stimulus package.

Senate Majority Leader Tom Daschle (D-SD) scheduled a vote on February 6 to determine whether the Senate would stop the stream of amendments to the bill and proceed with debate on his proposed economic stimulus package (also called a "vote on cloture"). As predicted, his bill did not receive the required 60 votes (56-49, see voting record on Thomas), and Daschle removed the stimulus bill from the Senate's schedule. That same day, Senate Republicans called for a vote on their proposed stimulus package -- similar to that passed by the House late last fall -- but were also unable to secure the 60 votes (48-47, see voting record on Thomas).

The Senate was able to agree on a single measure that had been included in both stimulus proposals and, by unanimous consent, passed a 13-week extension to the current allotment of 26 weeks of unemployment benefits for laid-off workers. Many in the Senate explained that they felt that passing the unemployment benefits extension by itself would offer the most expeditious path to addressing some of the most urgent needs created by the current recession, while also enabling the Senate to move on to other issues.

When the bill reached the House, however, it became clear that the economic stimulus debate was anything but resolved. The House took up the Senate's 13-week extension bill and then amended it by tacking on just about all of the provisions from its economic stimulus package (H.R. 3259) passed in December 2001. In addition to the 13-week unemployment extension, the House passed the following provisions on February 14 (225-199) see vote count):

(Cost estimates are provided in the Joint Committee on Taxation's February 14 report, "Estimated Budget Effects of the Revenue Provisions of the 'Economic Security and Worker Assistance Act of 2002")

• "Supplemental Stimulus Payments" (These are the tax refunds -- $300 for individuals; $600 for couples -- to those who did not receive them under the Bush tax cut in June 2001.)
  
  
• Acceleration of the creation of the 25% tax cut bracket to 2002 (Under current law this would not occur until 2006.)
  
  
• Increase Individual AMT exemption (The exemptions, which are an attempt to reduce the number of middle-income tax payers impacted by the Alternative Minimum Tax, will expire at the end of 2006.)
  
  
• Various Business Tax Provisions (Among other provisions, these include an accelerated rate of depreciation of equipment.)
  
  
• Corporate AMT Modification (Unlike the original bill passed by the House, this new bill does not repeal the corporate AMT and only impacts future payments -- it does not call for the refunding of past payments by corporations. Nevertheless, with a 10-year cost of $16 billion, this provision is the second most expensive of the bill's entire $153 billion 10-year cost -- second only to the $44 billion cost of accelerating the formation of the 25% income bracket.)
  
  
• Extension of Various Expiring Tax Provisions
  
  
• TANF Supplemental Grants for Population Increases in FY 2002 and a 1-Year Extension of TANF Contingency Funds (Total, 10-year cost for these two provisions is $330 million.)
  
  
• Tax Benefits for Areas of New York City Damaged by Terrorist Attack
  
  
• "Displaced Worker Health Insurance Credit" (Provision creates a 60% refundable tax credit for the purchase of health insurance -- either COBRA or private insurance -- by unemployed workers.)
  
  
• "Employment and Training Assistance and Temporary Health Care Coverage Assistance Provisions

It is worth noting that many of the provisions passed by the House last week fall under the Congressional Budget Office's category, "Small Bang for the Buck," indicating that the provision would have little positive impact on the efforts to stimulate the economy relative to its costs to the federal government. This was especially true for the corporate AMT reductions, other business tax cut incentives, and acceleration of income tax bracket reductions.

Shortly after the House vote, the Senate passed its 13-week extension again, this time as a substitute to the House's original economic stimulus package, H.R. 3090.

The Center on Budget and Policy Priorities (CBPP) pointed out that the House-passed plan was the same one that failed in the Senate last week and so the future of an economic stimulus package is now more uncertain than ever -- even as various economists report that the country's unemployed workers need help immediately. CBPP released a report following the House vote on Thursday indicating that 11,000 workers exhaust their 26 weeks of unemployment every day and predicts that by the end of the first half of this year, 2 million workers will have used up their allotment of unemployment benefits. The report also provides a state-by-state listing of the number of workers who have already, or soon will, reached the end of their unemployment benefits. Last month the Economic Policy Institute (EPI) issued an analysis explaining that even as many economists report the start of a recovery for the economy, many American families will not benefit from such a nascent recovery -- and will actually continue to struggle until the economy returns to a growth rate of 3.0% to 3.5%. The EPI report suggests that even if the economy recovers at the rate currently expected, unemployment could reach 6.0% or even 6.5%, further underscoring the need for assistance to unemployed workers and other low-income Americans.

It remains unclear whether any "economic stimulus" package will pass at all. If not, it is likely that the unemployment extension will become its own legislation, divorced from anything to do with "economic stimulus" since that effort seems doomed.