£70bn package for US economy

THE US Senate ended months of partisan gridlock and passed a stimulus package that will inject an estimated $100bn (£70bn) this year and next into the already rebounding American economy.

The House passed a similar Bill earlier in the week despite testimony by Federal Reserve chairman Alan Greenspan that the US economy would probably recover from the mild recession without added fiscal stimulus.

Congress has been under tremendous pressure to respond to 11 September and the legislation will improve unemployment benefits for displaced workers as well as create tax incentives for businesses to invest in new plants and equipment, one of the biggest areas of weaknesses in the US economy.

The Bill, passed almost exactly six months after the 11 September attacks temporarily halted US commerce, is designed to spur business investment this year and next to take advantage of accelerated write-offs. The legislation also creates a special 'liberty zone' in Lower Manhattan giving tax breaks to businesses that locate there.

The US economy is clearly on the mend, as unemployment data released today show - a higher-than-expected 66,000 found jobs in February - but America's politicians did not want to return to their homes for the spring recess without having addressed the economic downturn.