Here’s who won and lost in Congress’s new spending deal

22 Dec 2015 | Author: | No comments yet »

A bipartisan deal in hand, Congress ready for year-end push on spending, tax cut grab bag.

Congressional leaders agreed to a budget-busting set of tax cuts late Tuesday as part of a year-end, clear-the-decks deal that marks a major reversal from the last four years’ focus on deficits and streamlining the tax code. WASHINGTON—U.S. lawmakers unveiled a tax-cut package late Tuesday night that would revive dozens of expired breaks and lock many of them into law permanently.Democrats, Republican defense hawks and businesses seeking permanent tax breaks are the big winners as lawmakers finalize the sprawling, last-train-leaving-Congress spending and tax deal.WASHINGTON (TheBlaze/AP) — Congressional leaders and the White House have reached agreement on a massive year-end tax and spending package, House Speaker Paul Ryan told GOP lawmakers late Tuesday, urging support for the legislation that delivers GOP wins but also includes many Democratic priorities.

While the total cost of the package had not been publicly estimated by the Congressional Budget Office, it was expected to total in the hundreds of billions of dollars over the next decade — undoing in one swoop many of the deficit gains the GOP had won under then-Speaker John A. The bill includes Republican and corporate priorities such as making the research-and-development tax credit permanent for the first time since it was created in 1981 and expanding it so that some small companies that aren’t making profits can take the credit against payroll taxes. Despite dissenters in both parties, passage was likely and President Barack Obama’s signature seemed assured for an accord bearing victories for everyone from oil companies and working-class families to 9/11 emergency workers and biomedical researchers. Democrats, in turn, would win permanent extensions of some of President Barack Obama’s priorities—expanded tax credits for low-income and middle-class families that are scheduled to lapse at the end of 2017, after he has left office. They said they were still studying the spending measure. “In my view it is practically an immorality in terms of how it damages the future,” House Minority Leader Nancy Pelosi, D-Calif., said about the tax bill.

The spending bill would fund the government through September 2016. “In divided government no one gets exactly what they want,” Ryan told reporters Wednesday morning. The child-tax credit, earned-income tax credit and a college-tuition credit would all get extended indefinitely at their current levels, without the indexing to inflation some Democrats had sought. Republicans were likely to strongly support the tax measure but lean heavily against the $1.1 trillion spending bill, which they consider too costly, meaning it will need Democratic votes to pass. With temporary financing of federal agencies expiring Wednesday at midnight, congressional leaders planned to approve a stop-gap bill preventing a government shutdown through next Tuesday, giving lawmakers time to finish the long-term spending legislation.

The deal explicitly exempts itself from budget rules that normally require all new spending or tax cuts to be offset by tax increases or spending cuts elsewhere in the budget. Popular bipartisan tax breaks for charitable donations would also be made permanent, including a provision that lets people move money directly from individual retirement accounts to charities, meaning they never have to include it in their income. John Kline, R-Minn., said coming out of the meeting. “If you’re going to move forward and follow Speaker Ryan’s notion that we move onto offense next year … Let’s put 2015 behind us and move onto 2016.” Ryan “said that in a divided government you’re going to have some concessions, that’s what compromise is about,” added Rep. The two-part compromise announced Tuesday included a $1.1 trillion measure funding federal agencies in the 2016 federal budget year that started Oct. 1. Taxpayers would be able to deduct sales taxes instead of state income taxes from their federal income, an important break in states that lack income taxes such as Florida and Texas.

Such riders ran the gamut, from challenges to the Obama administration’s limits on power plant emissions to efforts to undercut new bank regulations and undermine the health care law. Senate passage of both measures, which the chamber’s top Democrat said he would support, would be Congress’ coda to a tumultuous 2015 that often saw Republicans at each other’s throats and the forced retirement of former Speaker John Boehner, R-Ohio. Republican leaders predicted the package would come to a vote in the House and Senate on Thursday, allowing lawmakers to head home for the holidays having completed their needed tasks. GOP lawmakers mocked it as a relic that ignored today’s burgeoning U.S. supplies enabled by new drilling methods, while critics called the move an environmentally damaging windfall for big oil companies. Ron Wyden of Oregon, the ranking Democrat on the Finance Committee. “Millions of working families with children will not find themselves suddenly taxed into poverty.

Republicans pressed for relief for the Pentagon from automatic budget cuts and were satisfied with a $33 billion boost for the Defense Department in 2016. Some conservative Republicans said Wednesday they may vote against it, and two senior House Democratic aides said that placing the language to lift the crude oil ban in the government spending bill — not the tax extender package — will reduce the number of Democratic votes. The deal, Congress’ last major piece of unfinished business for the year, became the vehicle for countless long-sought priorities and odds and ends, including reform of visa-free travel to the U.S. and extensions of health benefits and compensation for 9/11 first responders. The Senate Democratic leader, Harry Reid of Nevada, said in remarks from the floor of the chamber on Wednesday that the the deal was imperfect but a “good compromise” that would protect middle-class Americans and boost the use of clean energy.

They also blocked GOP proposals to thwart Obama administration clean air and water regulations, but many still found the lifting of the oil export ban a bitter pill. Ryan himself has described the process around the sprawling spending bill as a “crap sandwich,” and his announcement of a deal happened simultaneously with a GOP presidential debate that drew far more attention. The bill mixes a range of Republican-policy provisions, such as preventing the Securities and Exchange Commission from requiring publicly traded companies to disclose their political contributions, with benefits to industry groups from health care to broadcasters to meat processors. The boost means generous increases for readiness and equipment maintenance accounts, as well as plenty of money for buying new weapons like fighter planes and ships. Ryan, elected speaker in late October, and fellow Republicans want to show they can govern after years of threatened government shutdowns and a 16-day partial shutdown in October 2013.

Taxes imposed to help pay for Obama’s 2010 health care overhaul, which Republicans have long sought to unravel, were curbed — to the applause of the GOP and many Democrats. Tax breaks on everything from racehorses and film productions to NASCAR racetracks to college tuitions and teachers’ out-of-pocket classroom expenses are covered in the massive deal. These included a tax on high-cost health insurance whose scheduled 2018 start was delayed two years, a win for unions, and a suspension in 2016 and 2017 of the 2.3 percent levy on many medical devices.

Also included is a permanent extension of the research and development tax credit, created by Congress in the early 1980s as a temporary boost to the slumping economy. Language limiting reimbursements to insurance companies losing money on the federal and state health insurance exchanges was retained, despite Democratic efforts to erase it. Many expired tax breaks were renewed temporarily, including reductions for some companies on Indian reservations, race horses and some film and TV productions. And the agreement unravels one of the key tax increases in Obamacare, in a move budget watchdogs had long warned against, saying it would make the massive health overhaul a bad deal for taxpayers.

That included one making it much harder for Syrian and Iraqi refugees to enter the U.S., which the House approved after last month’s terror attack in Paris. Under only-in-Washington logic, renewing dozens of special-interest tax breaks could actually help prospects for reforming the loophole-cluttered tax code. Mandatory “country-of-origin” labeling of meat imported from other countries would be ended under the bill, a change Senator Pat Roberts, a Kansas Republican who is chairman of the Senate Agriculture Committee, praised. U.S. meatpackers including Tyson Foods Inc. had sought a repeal and the move may help stave off $1 billion in retaliatory tariffs that Canada and Mexico won from the World Trade Organization earlier this month. Congress also wants the government to rein in a nutrition panel that called for cutting meat and sugar in American diets in a draft of guidelines that upset industry groups and lawmakers earlier this year.

Broadcasters including Sinclair Broadcast Group Inc. and Nexstar Broadcasting Group Inc. also would get relief in the spending plan from pending restrictions on their ability to control more than one television station in a city, according to bill text. Other provisions include restoring health benefits for first responders to the Sept. 11 terror attacks who became sick because of their work and health-care payment aid for cash-strapped Puerto Rico, whose governor is in Washington this week. The measure would increase payments to hospitals on the island and provide bonus Medicare payments to doctors and medical facilities that adopt electronic health-record keeping. Ryan just got a crash course in the process of cobbling together a spending bill that needs to win Democratic votes and placate Senate old-timers like Appropriations Committee Chairman Thad Cochran, R-Miss.

U.S. oil producers, including Continental Resources Inc., Pioneer Natural Resources Co. and ConocoPhillips, have been pressing for an end to restrictions on exports of most raw, unprocessed crude. “We have the best technology, the best oil and over time we will drive out Russian oil, we will drive out Saudi, Iranian,” Republican Representative Joe Barton of Texas said in an interview. “It puts the United States in the driver’s seat of energy policy worldwide. People who have traveled recently to Iraq, Syria or other countries deemed to have significant terrorist activity would have to go through the normal visa process. The legislation also would ratify an International Monetary Fund plan approved in 2010 to increase the voting share of emerging economies and double the amount of permanent funding available to the Washington-based fund.

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