ABOUT THE AUTHORS
Sen. Olympia J. Snowe is a senior member of the Senate Finance Committee and Sen. Max Baucus, D-Mont., is the committee's chairman.
At a time when we face the longest recession since World War II, Americans are yearning for an effective and efficient government that identifies solutions to the problems affecting their everyday lives.
The recently enacted stimulus legislation considered in the U.S. Senate helped debunk the myth that Washington cannot yield consensus on critical challenges facing our nation today.
As chair of the Senate Finance Committee and a senior member of the committee, we are proud to have worked together, across the aisle, to set the tone for the stimulus debate.
We have helped to produce a compromise that sends a strong signal to the American people that this Congress is committed to putting our country back on the road to recovery. Economists across the ideological spectrum have agreed that fiscal stimulus is necessary to provide the positive jolt our economy urgently requires. Inaction was not an option.
Ultimately assembling 61 percent of the final bill, our committee put partisan politics aside, resolved our differences and embraced a package that creates jobs, provides tax relief and assists those who have been displaced by this crisis.
And in the waning hours of the negotiation process, we collaborated to trim an additional $25 billion in tax provisions to contribute significantly to the overall paring of the final bill.
We ensured the package held fast to the necessity of forging a stimulus bill that is timely, targeted, and temporary – and will create or retain 3.5 million jobs nationwide as it delivers more than $1 billion overall to Maine.
Spending more than 10 hours in the Finance Committee amending and improving the finance portion of the bill, we created provisions that ultimately included not only tax relief to 95 percent of hardworking American families and shielded 30 million middle-income families from the onerous Alternative Minimum Tax, but also provided incentives to our nation's greatest job-generators – our small businesses.
In fact, the package extends expensing at the $250,000 level for small businesses, so they can make investments in plants and equipment and deduct them immediately. Businesses with under $15 million in annual revenue with losses can receive an immediate tax refund, thus helping them sustain operations and retain employees.
We provided additional funding of $5 billion to expand the New Markets Tax Credit, which has a proven record of boosting economic development, and the added allocation for 2008 alone will generate 11,000 permanent jobs and 3,500 construction jobs.
Recognizing the nationwide impact of 45 states currently experiencing a budget shortfall – with a projected, combined $350 billion budget gap over the next two years – we championed inclusion of $87 billion for additional Medicaid funds to states. Maine is now estimated to receive $420 million in additional federal Medicaid assistance to assist with the cost of maintaining services for current enrollees and to help those who have become newly eligible with the deterioration of the economy. Also, we ensure that health care providers are promptly paid while preventing states from using these increased federal matching funds to expand income eligibility.
We included $34 billion for adoption of Health Information Technology by healthcare providers, which will result in an eventual $12 billion in savings while creating an additional 40,000 jobs that will endure.
As we grapple with the gravity of our economic circumstances, it only makes sense to create transformational, well-paying jobs that will ensure America is competitive in the 21st century global economy.
That's why we fought for tax credits for renewable energy that will create more than 89,000 jobs – in fact, in Maine, there are projects that could be ready to move forward now.
Finally, as we heard from the Congressional Budget Office last year, extending unemployment benefits is a preeminent stimulus tool, as the CBO concluded its cost-effectiveness is "large," the length of time for impact is "short" and the uncertainty about the policy's effects is "small."
Moody's Economy.com estimates that every dollar spent on unemployment benefits generates $1.63 in near-term Gross Domestic Product. That's why the package included $40 billion to extend unemployment insurance and a measure to exclude the first $2,400 of unemployment benefits from taxation, to further maximize the provision's stimulative impact.
These are truly consequential times with challenges that call for exceptional action and cooperation. Congress has delivered legislation that spurs significant job creation and helps those most affected during these trying times.
As we continue to move ahead, let us learn from this committee's work, which proved that we can turn the partisan tide at this transformational time in our nation's history.
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