Canton Repository

December 13, 2001

Manufacturing group backs bill 

Copley News Service 

WASHINGTON — The National Association of Manufacturers, promoting an economic stimulus bill languishing in Congress, said Wednesday its passage was the best hope for at least a modest recovery next year.

In its annual economic forecast, the group predicted the economy will grow by 1.7 percent in the first three months of next year, 2.4 percent during April to June and 3.5 percent in the second half of 2002, if a bill is passed.

Don Wainwright, chairman of the association, said the stimulus bill is “badly needed” to promote business investment. A provision in the legislation that would eliminate or modify the corporate alternative minimum tax is “extremely important” because it would leave
businesses with more cash to invest, he said. Congress created the tax in 1986 to prevent corporations from using deductions and credits to avoid paying taxes altogether.

Wainwright is chairman and chief executive officer of Wainwright Industries in St. Louis. The previous chairman of the association was W.R. “Tim” Timken Jr., chairman and chief executive officer of The Timken Co. in Canton.

The economy has been in recession since March, when economic growth gave way to shrinkage for the first time since 1990. The manufacturing sector stopped growing six months before the rest of the economy.

Jerry Jasinowski, president of the association, cautioned that without legislation to stimulate the economy, it could slip back into recession.

“We think it’s very important to proceed with the stimulus bill,” he said. Based on his talks with administration officials, he believes “there’s a good chance” Congress could agree on a stimulus bill by the end of the week.

Republican and Democrat lawmakers have feuded over what should be in the bill, which is a mix of tax cuts, business write-offs and aid to the unemployed. With the legislation in trouble, President Bush offered a revised bill to congressional leaders Wednesday.

The association expects the economy to hit bottom during the last three months of this year, shrinking by 2.7 percent. Steep drops in business investment and exports have played an unusually large role in stifling economic growth, compared with the 1990 and 1982 recessions, the association said.

Reduced inventories, falling energy prices, low interest rates and higher defense and anti-terrorism spending will drive economic growth next year, the group believes. With inventories down, manufacturers will have to ramp up production to meet demand for
their products.