Chamber of Commerce: Recession is here to stay

The U.S. economy is in a recession that “will likely last longer and run much deeper than either of the two previous economic crises,” the U.S. Chamber of Commerce said in a letter sent today to members of Congress. The Washington-based Chamber, which represents more than 3 million businesses, called for Congress to pass an economic stimulus package that includes rebate checks, as well as extending a reduced rate on dividends and capital-gains taxes for individuals and reducing corporate capital-gains tax rates to 15%. The economic stimulus plan being considered by Congress includes extending unemployment benefits, funding public-works projects and aiding state and local governments. The drop in the value of pension plan assets coupled with the credit crunch has put defined benefit plan sponsors “in an untenable position,” the letter said. “At a time when companies desperately need cash to keep their businesses afloat, the new funding rules require huge, countercyclical contributions to their pension plans,” which will cause companies to divert cash needed for job retention and creation to fund pension plans, the letter said. The Chamber called for looser contribution rules. The letter also called for infrastructure spending, aid to automakers and assistance to the housing industry.