SENATE FOLLOWS HOUSE IN ENACTING STIMULUS LEGISLATION
Telecom industry cheered Fri. as Senate followed House’s lead in passing stimulus bill that included tax breaks they had been seeking since last fall. On bipartisan vote of 85- 9, Senate quickly passed HR-3090, sent up by House only day before following 417-3 vote. Two provisions of scaled-down economic stimulus bill -- dubbed “jobs creation” bill by House Speaker Hastert (R-Ill.) -- are of particular interest to high-tech community: (1) 30% depreciation allowance on capital purchases for next 3 years. (2) 5-year carryback on net operating losses. White House spokesman Ari Fleischer last week said President Bush still felt Senate needed to act on stimulus legislation, and he’s expected to sign the bill, something several members noted during debate.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
Several previous attempts to pass stimulus legislation in Senate had resulted in partisan stalemate, but bill sent by House Thurs. was bipartisan compromise that at $43 billion was less than half size of 3 previous GOP-sponsored bills that had cleared House. Bill also contains 13-week extension of unemployment benefits, only provision Senate to date had been able to agree upon. Bill passed day after Federal Reserve Chmn. Alan Greenspan told Senate Banking Committee that economy was in recovery, but Sen. Smith (R-Ore.) said: “While signs of a recovery may be on the horizon, the recession isn’t over if you can’t find a job.”
“Accelerated depreciation is a top priority of the technology industry,” said Sen. Allen (R-Va.), and bill would spur capital expenditures and lead to new jobs. Senate Finance Committee ranking Republican Grassley (Ia.) also praised depreciation bonus and carryback provision, but said he would have preferred more tax relief. He said “we should not make a practice of passing House bills as is. These are not, however, normal times and this is not a normal process,” and as result of bill’s unamended passage it will go directly to Bush without needing conference or additional floor votes. From House, Rep. Wilson (R-N.M.) praised Senate vote, saying it would “help create jobs and provide relief for those who lost their jobs during the recent terrorist recession.”
USTA Pres. Walter McCormick said depreciation provision was “key” to telecom industry and group had lobbied hard for its inclusion, adding “this legislation will bring needed economic relief to our nation and will have a positive influence on the struggling telecommunications industry by encouraging new investments and creating more jobs for telecom workers.” Verizon Senior Vp-Legislative Matters Michael Boland said U.S. had been in “an investment-led recession. Congress today recognized that we need an investment-led recovery. Since last year, Verizon has been advocating this very policy.” He said Verizon “is one of the biggest buyers of high-tech products and services. We are ready to take advantage of this incentive.”
High-tech groups showered Senate with praise. Telecom Industry Assn. (TIA) Pres. Matthew Flanigan called vote “a victory for the technology sector,” saying it would “provide much-needed relief to businesses and the high-tech industry.” Information Technology Assn. of America (ITAA) Pres. Harris Miller said vote was “a shot in the arm” to IT industry that had seen its spending growth in U.S. “barely registering a blip on the economic radar screen.” He said IT customers would “pull the wraps off their capital spending budgets and jump-start IT projects.” Business Software Alliance (BSA) Pres. Robert Holleyman acknowledged economy was emerging from recession but said tech industry still had “a long way to go” and bill passed by Congress was “an essential first step.” Referring to nearly 6 months of debate on stimulus legislation, American Electronics Assn. (AeA) Pres. William Archey called just-passed bill “worth the wait,” thanking Senate for recognizing “the high-tech industry as a vital component of the nation’s economy.”