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Government Assistance
Congress Bloats The Bailout Bill
Brian Wingfield and Joshua Zumbrun 10.01.08, 9:35 PM ET.
Only in Washington could a $700 billion financial rescue package get $110 billion bigger to protect taxpayers. But that's exactly what happened Wednesday night as the Senate passed its own version of a bill aimed at unfreezing credit markets and steering the economy out of a crisis, putting pressure on the House of Representatives to do the same later this week.
With a vote of 74-25, the Senate made its best effort to create something they think will stave off crisis, coated with enough sugar to make it politically palatable.
"I am very, very happy with this vote tonight," said Senate Majority Leader Harry Reid, D-Nev. "I think it shows that when we work together we can accomplish great things." Senate minority leader Mitch McConnell, R-Ken. said: "This has been the Senate at its finest."
They had to do something. Monday, the House failed to pass an earlier, leaner, version of the legislation, sending the U.S. market into a tailspin and pushing frightened banks to tighten credit to record levels. Failure to pass something tonight risked still further damage to the already-weak economy.
While the inclusion of many business-friendly tax breaks in the bailout/energy/disaster relief/tax bill could draw some much-needed Republican votes in the House, it also risks alienating fiscally conservative Democrats. Their treasured "pay-go" rules, which require lawmakers to find ways to pay for additional spending or tax cuts, got trampled.
Included is more than $64 billion for a provision that keeps the Alternative Minimum Tax from ensnaring an additional 22 million taxpayers in 2008, according to a just-released analysis by the Joint Committee on Taxation. The extension of business tax incentives, including the research and development credit, will cost the government $36.8 billion from 2009 to 2018. Individual tax extensions, including the tuition and property tax deductions, add another $11.5 billion to the pile.
Relief for natural disasters throughout the U.S. this year costs $8.8 billion between now and 2018, under the Senate legislation. Also included are extensions for wind and solar energy tax credits, incentives for carbon sequestration projects and a credit for owners of plug-in electric vehicles. The energy provisions of the bill actually raise government revenue by $61 million, however.
House Ways and Means Committee Chairman Charles Rangel, D-N.Y., says many of the tax breaks were bound to pass in some other legislation. There's no way that Congress was going to adjourn for the year and allow constituents to get hit by the AMT. Same with disaster relief. Energy tax credits have broad support on both sides of the aisle.
But what about film and TV programs, which would receive a $344 million tax break? Or “motorsports racing track facilities,” which get a break of $140 million? Under the Senate plan, restaurateurs and retailers get a $5.8 billion break for restaurant and retail improvements. Indian reservations get a $624 million break to accelerate depreciation on business property. Washington, D.C., would benefit from $132 million of tax incentives to attract investment to the District.
“The Senate can’t believe this is the way the Congress and the House will move forward in the future," Rangel said in a statement. He didn't say that he would vote against it, however.
I guess I don't see the big picture
701EV
Congress Bloats The Bailout Bill
Brian Wingfield and Joshua Zumbrun 10.01.08, 9:35 PM ET.
Only in Washington could a $700 billion financial rescue package get $110 billion bigger to protect taxpayers. But that's exactly what happened Wednesday night as the Senate passed its own version of a bill aimed at unfreezing credit markets and steering the economy out of a crisis, putting pressure on the House of Representatives to do the same later this week.
With a vote of 74-25, the Senate made its best effort to create something they think will stave off crisis, coated with enough sugar to make it politically palatable.
"I am very, very happy with this vote tonight," said Senate Majority Leader Harry Reid, D-Nev. "I think it shows that when we work together we can accomplish great things." Senate minority leader Mitch McConnell, R-Ken. said: "This has been the Senate at its finest."
They had to do something. Monday, the House failed to pass an earlier, leaner, version of the legislation, sending the U.S. market into a tailspin and pushing frightened banks to tighten credit to record levels. Failure to pass something tonight risked still further damage to the already-weak economy.
While the inclusion of many business-friendly tax breaks in the bailout/energy/disaster relief/tax bill could draw some much-needed Republican votes in the House, it also risks alienating fiscally conservative Democrats. Their treasured "pay-go" rules, which require lawmakers to find ways to pay for additional spending or tax cuts, got trampled.
Included is more than $64 billion for a provision that keeps the Alternative Minimum Tax from ensnaring an additional 22 million taxpayers in 2008, according to a just-released analysis by the Joint Committee on Taxation. The extension of business tax incentives, including the research and development credit, will cost the government $36.8 billion from 2009 to 2018. Individual tax extensions, including the tuition and property tax deductions, add another $11.5 billion to the pile.
Relief for natural disasters throughout the U.S. this year costs $8.8 billion between now and 2018, under the Senate legislation. Also included are extensions for wind and solar energy tax credits, incentives for carbon sequestration projects and a credit for owners of plug-in electric vehicles. The energy provisions of the bill actually raise government revenue by $61 million, however.
House Ways and Means Committee Chairman Charles Rangel, D-N.Y., says many of the tax breaks were bound to pass in some other legislation. There's no way that Congress was going to adjourn for the year and allow constituents to get hit by the AMT. Same with disaster relief. Energy tax credits have broad support on both sides of the aisle.
But what about film and TV programs, which would receive a $344 million tax break? Or “motorsports racing track facilities,” which get a break of $140 million? Under the Senate plan, restaurateurs and retailers get a $5.8 billion break for restaurant and retail improvements. Indian reservations get a $624 million break to accelerate depreciation on business property. Washington, D.C., would benefit from $132 million of tax incentives to attract investment to the District.
“The Senate can’t believe this is the way the Congress and the House will move forward in the future," Rangel said in a statement. He didn't say that he would vote against it, however.
I guess I don't see the big picture
701EV
