A Small Step Forward

(This is an edited version of a post that first appeared on The Progressive Pulse, an NC blog)

The day after failing by one vote to break a Republican filibuster, the U.S. Senate passed a fiscal stimulus package similar to the problematic one adopted last week by the U.S. House. The House quickly accepted the Senate's changes and sent the bill to President Bush.

The congressional bill contains three broad measures: a tax rebate for individual tax payers; enhanced expensing and depreciation allowances for businesses and an increase in the size of the mortgages that can be insured by the Federal Housing Authority.

While the final tax rebate provision arguably is more equitable than the House's original version, Congress still failed to include several measures that would help the people most impacted by a downturn while injecting cash effectively and quickly into local economies. Omitted items include a temporary extension in unemployment insurance and a temporary increase in Food Stamp benefits. And the business tax provisions could result in a revenue loss to a number of Southern states, many of which already are facing projected revenue shortfalls. This is due to the inter-connection between the federal and state revenue systems.