WASHINGTON, Nov. 2 (UPI) -- President Bush on Friday met with Labor Secretary Elaine Chao and Treasury Secretary Paul O'Neill regarding unemployment figures that showed the jobless rate spiking to 5.4 percent, the first Labor statistics to reflect the economic reverberations of the terrorist attacks of Sept. 11.
"It's not good news for America," Bush said. "The attacks of Sept. 11 have deeply affected the lives of hundreds of thousands of people."
The number of unemployed people increased by 732,000 to 7.7 million in October. The unemployment rate in September remained unchanged at 4.9 percent, but reflected the largest decline in jobs in a decade.
Chao said the airline, travel, restaurant and hotel industries were hardest hit, but that there were some bright spots in the economy such as health care and education. She also said companies that offer security services are also hiring more employees.
She urged the Senate to pass the president's economic stimulus package. The White House had endorsed the $100 billion package passed by the House of Representatives, which was designed to help an economy since the attacks.
The House bill had four key provisions. It would repeal the corporate alternative minimum tax, cut the 27 percent income tax rate to 25 percent in 2002 rather than 2006, and allow greater business equipment purchase write-offs. It would also provide tax rebates for low-income workers.
Senate Democrats criticized the House version, saying the long-term cost was too high. Sen. Edward Kennedy, D-Mass., said that more than half of the dollars would not reach the economy for more than a year.
Kennedy has put forward a $71 billion alternative to the House bill that would temporarily extend unemployment compensation by 13 weeks, extend short-term unemployment insurance coverage to low-wage workers and cover 75 percent of COBRA health insurance premiums for a year. It would also temporarily provide Medicaid coverage to workers not eligible for COBRA.
A $70 billion alternative proposal was introduced by Senate Finance Committee Chairman Max Baucus, D-Mont. That package would extend unemployment compensation by 13 weeks, allows for a federal match of COBRA health insurance policy premiums at 50 percent.
On the tax cut side, the Senate bill provides for $35 billion in cuts out of the $70 billion total but does not provide for the repeal of the corporate alternative minimum tax and does not cut the capital gains tax.
Bush had urged Congress to focus on providing $60 billion in tax cuts in addition to the initial $60 billion in emergency aid for dislocated workers, discretionary spending for defense and the airline bailout package. He said that should be sufficient to stimulate the economy without more spending.
In the days after the attack, Congress approved a $40 billion emergency appropriation for the fight against terrorism. That spending measure included $20 billion to New York for its clean-up and recovery efforts and the remainder for national defense and aviation security.
Two weeks later, Congress passed a $15 billion airline bailout measure aimed at keeping the aviation industry flying in the wake of the Federal Aviation Administration's three-day grounding of flights after the terrorist attacks, which are estimated to have injured and killed some 5,000 people.
The president has also proposed $3 billion in health coverage assistance and income supplements for displaced workers.
On Wednesday, he said the nation has acted confidently and quickly to spend money to help rebuild New York and the Pentagon, stabilize the airline industry, and to take care of workers who have lost jobs.
"That spending has amounted to about $60 billion above and beyond our budget. That money will help with job creation and will help our economy grow. It's necessary to spend that kind of money in a time of emergency, and we're -- we're in times of emergency. But I strongly believe it's time to balance this amount of spending with additional tax relief," Bush said.