Senate panel unveils part of $455 bn stimulus

A Senate committee announced part of its economic stimulus plan, including $275 billion in tax cuts for businesses and producers of renewable energy that differ from a package proposed by House Democrats.

The Senate Finance Committee’s $455 billion measure will be merged with a broader bill expected to total $825 billion in tax reductions and public works projects. President Barack Obama met today with Democratic and Republican congressional leaders, urging them to agree on a plan and saying the nation may face an “unprecedented” economic crisis.

The Senate plan would give $30 billion in tax incentives to producers of renewable energy, or $10 billion more than was approved by the House Ways and Means Committee. It also would allow small-business owners to exclude more of their profits from capital gains taxes. In addition to the tax cuts, the finance committee’s bill includes $180 billion in health and unemployment benefits and other spending to help states.

“This country is in a world of economic hurt, and Congress has to act boldly now to stabilise the situation,” said Finance Committee Chairman Max Baucus, a Montana Democrat. “With the right mix of tax cuts and investments, the American Recovery and Reinvestment Act will create green energy jobs, highway jobs, health-care jobs and other opportunities for folks to get back on their feet.”

The measure would give companies tax relief on forgiven debt by letting them spread a tax on the value of amounts forgiven over a four-year period, a variation on more generous relief sought by business groups including the US Chamber of Commerce.

Companies including Oriental Trading Co and Harrah’s Entertainment Inc, partly owned by Carlyle Group and Apollo Management LP, respectively, have also lobbied for the provision.