Heading into today’s testimony from Federal Reserve Chairman Ben Bernanke, Republicans and Democrats are divided over what Congress’ imminent stimulus package should include. Key to any Republican sign off on a bill would be a provision making the 2001 and 2003 tax cuts permanent. Democrats want up to $100 billion in new spending and temporary tax rebates. Bernanke claims he will not comment on whether making the tax cuts permanent should be part of any stimulus package, but Democrats who met with Bernanke claim otherwise.
House Majority Leader Steny Hoyer (D-MD) told Bloomberg News that Bernanke agreed with him that steps being considered now ought to be “kept separate” from making the tax cuts permanent. Bernanke will fail to avoid being sucked into Congress’ stimulus debate unless he disavows Hoyer’s comments.
There are new projects, businesses, and expansions of existing business that are being canceled or delayed today due to uncertainty about the scheduled tax increases for 2009 and 2011. Since most major capital undertakings take longer than three years, making the 2001 and 2003 tax cuts permanent would stimulate economic activity today.
- On the heals of the National Intelligence Estimate claiming Iran has halted its nuclear weapons program, Iran’s top atomic negotiator lobbied to undercut United States efforts to convince China to back a United Nations resolution on Tehran’s nuclear program.
- Scientists studying along the United States-Mexico border are curtailing their research in response to increased threats from drug and migrant smugglers facing crackdowns from U.S. Border Patrol agents and new border fences.
- United States Southern Command Admiral James Stavridis warned a Latin America conference of a disastrous possible link between drug traffickers and radical Islamists. Stavridis accompanied his comments with a photograph of Iranian President Mahmud Ahmadinejad standing alongside Bolivian President Evo Morales.
- President Bush exempted the US Navy from environmental regulations that threatened to end submarine warfare exercises.
- Touring the Iraq-Iran border, General David Petraeus said Iran was still training militants to fight in Iraq despite Tehran’s pledge to cut support for the insurgency.