Economic stimulus package was compassionate and wise

There are those who say that the economic stimulus bill passed by Congress last week and signed by President Bush is unnecessary, in the light of indications that the economy is already in recovery. We hope they're right about the rebound, but regardless, this particular package makes good sense.
The bill does two things.
It extends unemployment benefits from the normal 26 weeks to 39 weeks. That's especially significant to any workers who lost their jobs in the wake of Sept. 11.
Their benefits were running out and -- economic rebound or not -- many of them are still without work. If, indeed, the recession is ending, the 13 week cushion may be just what hundreds of thousands of workers need to tide their families over.
During those three months, many of those people will be able to find work, and they'll be able to get on with their lives without have depleted every penny of their savings. The bill was a compassionate response to the plight of the nation's unemployed.
The second part of the bill is the kind of corporate tax cut that we have supported in the past, one that strongly encourages companies to invest in new equipment that will make them more productive.
Under the law, businesses could see an immediate 30 percent depreciation during each of the next three years for new investments made after Sept. 10, 2001, and before Sept. 11, 2004.
The law effectively provides a discount for new equipment purchases made during that period. Manufacturers and high-tech companies are prime beneficiaries of the provision.
It covers computers, office machinery, some software, vehicles, office furniture, factory and farm machinery, private roads and utility equipment.
Makes more sense: The new schedule brings depreciation rates more in line with the useful life of much of the equipment that companies buy. It is likely to spur business investment, an area of the economy that remains stagnant.
The bill certainly made more sense than the package the House attempted to push through a month after Sept. 11. It would have repealed the corporate alternative minimum tax, distributing $25 billion in retroactive tax cuts dating back 15 years to some of the nation's largest companies -- no strings attached.
Even the final version is not without a downside, however. Because many states tie the taxes they collect to a corporation's federal tax payments, those states will suffer a loss in income at a time when they, too, are struggling.
But on balance, given that states will benefit from the extension of unemployment payments and from new investments made by their corporate citizens, Congress was wise to pass the package and President Bush was wise to sign it.