HR 927 IH

To provide for a tax reduction in the case of low economic growth.

March 7, 2001

Mr. OBEY (for himself, Mr. MORAN of Virginia, and Mr. FRANK) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on the Budget, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

To provide for a tax reduction in the case of low economic growth.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Standby Authority to Fight Economic Recession Tax Cut Act of 2001'.

SEC. 2. TAX REDUCTION IN THE EVENT OF LOW GROWTH.

(a) LOW-GROWTH REPORT-

(1) IN GENERAL- At any time, the Director of the Office of Management and Budget (hereafter in this section referred to as the `Director') may notify the President and the Congress if the Director--

(A) determines that paragraph (2) was met for the 2 quarters preceding the quarter during which the notification is given, or

(B)(i) projects that paragraph (2) will be met for the quarter during which the notification is given, and

(ii) determines that such paragraph was met for the preceding quarter.

(2) REQUIREMENT- This paragraph is met if either--

(A) economic growth as measured by the change in real Gross Domestic Product (GDP) at an annual rate is estimated to be less than 1.5 percent, or

(B) there is a decrease in the number of employed individuals.

Nothing in this section shall be construed as preventing the Director from taking into account estimates which are subject to revision.

(b) PRESIDENTIAL AUTHORIZATION OF TEMPORARY TAX REDUCTIONS-

(1) PRESIDENTIAL DECLARATION- After notification under subsection (a), the President may issue a declaration that temporary income tax reductions are required for a specified calendar year to provide a quick and necessary fiscal stimulus to the economy. Any such declaration shall be transmitted to the Congress.

(2) TEMPORARY TAX MODIFICATIONS- If the President transmits a declaration under paragraph (1) to the Congress, effective for taxable years beginning in the calendar year specified in such declaration--

(A) the rates applicable to the first income bracket in the tax tables contained in section 1 of the Internal Revenue Code of 1986 shall be reduced by a number of percentage points (not to exceed 3 percentage points) specified in such declaration,

(B) the amounts set fourth as tax in such tables shall be adjusted to reflect such rate reduction, and

(C) the withholding tables or procedures prescribed under section 3402(a) of such Code shall be modified as specified in such declaration (including having different withholding rates apply to portions of a calendar year).

SEC. 3. TREATMENT UNDER PAY-AS-YOU-GO PROCEDURES.

Any reduction or increase in receipts resulting from section 2 of this Act shall not be considered for any purpose under the Balanced Budget and Emergency Deficit Control Act of 1985.

END