NRF continues to push for stimulus changes

WASHINGTON The National Retail Federation told Congress that economic stimulus legislation being negotiated between the House and Senate would provide assistance to consumer spending but still doesn’t do enough to provide the jumpstart that would bring shoppers back into stores.

NRF welcomed the legislation’s “Making Work Pay” tax credit, a Home Ownership Tax Credit for home buyers and other initiatives aimed at low- and middle-income families, saying they would make a contribution to the economy because those taxpayers are most likely to spend the extra cash.

“While these and other individual tax provisions will provide stimulus, this massive measure still fails to provide the direct and targeted tax relief needed to stimulate consumer spending,” NRF SVP for government relations Steve Pfister said. “With consumer spending representing two-thirds of GDP and consumer confidence at the lowest level since records have been kept, it is difficult if not impossible to foresee an improvement to overall economic growth until consumers regain confidence and resume spending.”

Pfister’s comments came in a letter to members of a congressional conference committee working to negotiate a compromise between versions of the American Recovery and Reinvestment Act passed by the House and Senate.

Pfister said NRF supports a provision of the legislation that would allow businesses to offset current losses against previous profits from as long as five years ago rather than the current two-years. The change in “carry back” rules would give companies $15 billion to $20 billion in badly needed cash, about a quarter of which would go to retailers struggling to keep stores open and employees on the payroll.

But NRF opposes a provision that would allow laid-off workers who are 55 or older or who have worked at a company for 10 years or more to continue their health insurance coverage under COBRA until they find another job or qualify for Medicare. NRF cited a study showing that the provision would cost employers between $39 billion and $65 billion over 10 years on top of the “already crushing” cost of employee health insurance, and said the issue should be dealt with as part of health care reform rather than economic stimulus.