WASHINGTON (Reuters) - Congressional Democrats’ push for another U.S. stimulus package got a boost on Tuesday from an analysis that found their earlier effort had blunted the impact of the worst economic downturn in 80 years.
As Democrats weighed measures to bring down the nation’s double-digit unemployment rate before the November 2010 congressional elections, they touted a nonpartisan report that showed the $787 billion stimulus package passed in February had kept between 600,000 and 1.6 million people off the unemployment rolls.
That effort, panned as a boondoggle by Republicans, also boosted the nation’s GDP between 1.2 percent and 3.2 percent, the Congressional Budget Office found.
Democrats hope to pass a more modest effort in the next two months, targeted at bringing down the unemployment rate.
That rate, currently at 10.2 percent, could have been above 11 percent had Congress not passed the first stimulus package, House Majority Leader Steny Hoyer said.
“Is it where we want to be? It is not, but it is certainly a very, very definite, positive impact on the economy,” Hoyer told reporters. “The actions we have taken have worked.”
Elements of the next package are still up in the air, Hoyer and other lawmakers said but could include:
* New spending on highways, levees, rail and other infrastructure
* Increased lending for small business, using funds left over from the $700 billion Troubled Assets Relief Program
* Money to help struggling state governments avoid laying off police, schoolteachers and other public employees
* Money to local governments for job-creating programs like park cleanups and refurbishing public buildings
* Further extending unemployment benefits and health-insurance subsidies for the jobless
* A tax credit for businesses that hire new employees
* Extending a package of soon-to-expire business tax breaks, such as a credit for research and development.
The package could also include a tax on financial transactions, which several Democratic senators said would have to be written in a way to avoid driving financial activity offshore.
“I don’t want to impose a tax that clearly is going to make American companies less competitive, (but) it’s on the table,” said Democratic Senator Max Baucus, chairman of the tax-writing Senate Finance Committee.
Many of these provisions, such as the unemployment insurance and business tax breaks, will need to be renewed before they expire at the end of the year, Hoyer said. But the House might wait on other elements until next year, he said.
“Time is not the issue. Getting it right is the issue,” he said.
Senator Byron Dorgan, one of the stewards of the effort in that chamber, hopes to have a jobs bill ready for a vote in January, as soon as the Senate finishes work on healthcare, an aide said.
Dorgan has scheduled a hearing on Wednesday to examine whether banks that received bailout funds from the government are lending to small businesses.
“We’re looking at a wide range of issues trying to find ways to get some additional credit for those businesses that want to expand and hire people,” he said.
Editing by Cynthia Osterman