SUPPORTS SUBSTITUTE PLAN CENTERED ON INDIVIDUAL AND BUSINESS TAX RELIEF

Washington, Jan 28, 2009 - “We need to take bold steps to reinvigorate the economy and restore job growth,” said Rep. Cliff Stearns (R-Ocala). “Yet the House plan would merely stimulate government growth and government debt. In addition, instead of providing an immediate impact, most of the spending in this bill would occur 19 months from now. We need a stimulus plan that puts dollars in the pockets of consumers and encourages businesses to create jobs now.”

The House today approved H.R. 1, the House Leadership’s version of stimulus legislation. This bill includes $604 billion in new spending and $212 billion in tax relief for a total of $816 billion over the 2009 to 2019 period. While this plan is aimed at quickly injecting government cash into the economy, only 15 percent (or $93 billion) of the spending will occur during this fiscal year and only 37 percent of the spending would occur in fiscal year 2010. This means that over half of the plan's spending will occur starting in 2011 and subsequent years.

“President Obama claims that this measure would create or save 3 to 4 million jobs,” added Stearns, “that’s essentially spending $300,000 for each of the 3 million jobs. As for its tax relief provisions, many of them expire after two years. Finally, much of the spending goes to government programs instead of job growth -- $7.7 billion for federal buildings, $50 million for the National Endowment for the Arts, $600 million to expand the federal car fleet, and $1 billion for the Census.”

Stearns joined in supporting an alternative plan providing $444 billion in tax relief, $232 billion more than H.R. 1; and $34 billion in spending, $570 billion less than H.R. 1. The substitute would reduce the 15% income tax rate to 10%, extend relief from the Alternative Minimum Tax for two years and index it to inflation, provide businesses a 5-year carryback of net operating losses (currently a business may receive a refund equal to their negative tax liability up to the amount of taxes paid over the previous 2 years, this would increase that to 5 years), extend the present small business expensing that allows the writing off of up to $250,000 in capital expenditures with a phase-out threshold of $800,000 for 1 year, exclude unemployment compensation from federal income taxes, and extend unemployment compensation through 2009.