Sundry on the Stimulus

By February 13, 2009Economy, Taxation, Trade

Washington Post, “In Midwest, Obama Sings Praises of Stimulus Plan“:

EAST PEORIA, Ill., Feb. 12 — President Obama on Thursday touted the $789 billion economic stimulus package nearing congressional approval, telling workers at a huge manufacturing plant here that “a new wave of innovation, activity and construction will be unleashed all across America” once the plan is enacted.

The Post’s story is built around the President’s appearance at the Caterpillar plant in Peoria, Ill. Caterpillar and its top executive, Jim Owens, are advocates of expanded trade opportunities. So…

While Owens supports the stimulus plan, he is part of a group of manufacturing executives who had expressed concern that a “buy American” provision in the stimulus legislation could lead to retaliatory actions by other countries. The provision would require infrastructure projects in the stimulus bill to be built with U.S.-made iron and steel.

The final version of the stimulus bill includes the provision, although it says it must be applied in a manner consistent with U.S. obligations under international agreements.

“Absence of that wording would be perceived as violating our trade agreements and risking retaliation by countries accounting for 80 percent of our exports,” said Franklin J. Vargo, vice president for international economic affairs at the National Association of Manufacturers. “Even with that language, the provision affects countries not participating in the World Trade Organization agreement or not having a bilateral trade agreement with the United States.”

And a reasonable Washington Post editorial, “A Fiscal Gamble — The stimulus package isn’t pretty, but it is a risk worth taking.”

Finally, Bloomberg reports on the weakened tax provisions included in the final conference report, a set-back for manufacturing and the economy, “Tax benefit push falls short“:

WASHINGTON — The National Association of Manufacturers lost a last-minute lobbying campaign to fully restore a business tax break that House and Senate negotiators all but eliminated from the $789 billion economic stimulus bill.

Instead, lawmakers agreed to make more companies eligible for the tax break while still shutting large companies out of the benefit, according to a description released by the Senate Finance and House Ways and Means committees.

For the NAM’s view of these developments, the tax provisions, and our support for final passage, see this statement and letter posted at last evening.


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