House passes tax portion of year-end budget deal

23 Dec 2015 | Author: | No comments yet »

Congress’ half-trillion-dollar spending binge.

Republicans whipped more than $600 billion in compromise tax breaks for businesses, investors and families through the House on Thursday, as Congress tried capping 2015 with a flurry of accomplishments before the partisan collisions certain to dominate the coming election year. The House Democratic leader, Nancy Pelosi, joined the White House in announcing support for a $1.1 trillion spending plan that would avert a U.S. government shutdown and lift the 40-year-old ban on crude oil exports.

Donald Trump warns that the nation is at risk of becoming “a large-scale version of Greece.” And Marco Rubio says the debt will “shackle future generations.” But on Capitol Hill this week, just hours before they jet away for the holidays, the GOP-led Congress is going on a $680 billion spending spree — none of which will be paid for by budget cuts or other tax offsets. The spending bill, which would fund the government through September 2016, is being paired in Congress with a separate $622 billion measure to revive a series of expired tax breaks. Congressional leaders hope to ship both bills, a 2,200-page legislative bundle, to President Barack Obama on Friday for his promised signature and adjourn for the year. But after years of relative fiscal austerity, including enactment of relatively modest spending rollbacks, GOP lawmakers are steaming toward passing a mammoth $680 billion tax package without offsets. The tax bill would mostly renew scores of existing breaks that have lapsed or are about to, but its scope was impressive, with victories for both parties.

It would make permanent a host of temporary tax breaks commonly called “extenders” — and is also chock-full of goodies for specific business interests and constituents. There’s something from everybody’s wish list: breaks for energy-efficient homes and commercial buildings; deductions for business office furniture, computers and machines; tax savings for the film and TV industries and rum producers in the Caribbean; and even tax perks for owning a racehorse or two-wheeled plug-in electric car. In fact, Democratic leaders might have only gotten louder in their opposition to a measure that doesn’t index the Child Tax Credit to inflation. (It does extend expansions of the child credit and Earned Income Tax Credit for good.) Rep. Kevin Brady, R-Texas, chairman of the tax-writing House Ways and Means Committee. “This permanent tax relief will make it easier for employers to plan ahead, hire new workers, grow their businesses.” Most Democrats opposed the tax package, complaining that it would worsen federal deficits and make it harder to find money for the domestic programs they favor. The cost, combined with the interest the U.S. would pay after borrowing the money to pay for it, would rise to $830 billion and undo much of the savings squeezed from painful automatic spending cuts called the sequester, according to MacGuineas’ group.

Obama and many congressional Democrats oppose lifting the ban on oil exports, but White House spokesman Josh Earnest told reporters Wednesday the fiscal package, H.R. 2029, was a success for the administration. “We feel good about the outcome,” Earnest said. In the first test of his nascent tenure, Ryan helped craft a proposed tax-and-spending package that appears to be a real give-and-take with Democrats.

They also said it was imbalanced, with 60 percent of its permanent reductions going to business and just 40 percent to families. “Middle-class wages are stagnant or in decline,” said Rep. Republicans have instituted rules that block such measures unless they’re paid for — restrictions they will waive for themselves on this particular occasion.

Rose DeLauro, D-Conn., an argument that Democrats are sure to press in the 2016 campaigns. “We need to do whatever we can to support working people.” Tax credits for college expenses, child costs and lower-earning families are set to become permanent, as would cuts for companies that do research or buy equipment. Speaker Paul Ryan can count on strong support from Republicans to pass the measure, which he negotiated as one of his first acts since taking over the House. We are not doing anything for yet another year to take the debt burden off our kids and grandkids,” Representative John Fleming of Louisiana said in an interview on Thursday. “All we get is increased spending and Democrat priorities.” Second-ranking House Democrat Steny Hoyer said his party was unhappy that Republicans placed the language to lift the crude oil ban in the government spending bill instead of the tax measure. Three members of the Democratic caucus — Angus King, Joe Manchin and Mark Warner, all former governors — are slated to discuss the fiscal irresponsibility of the deal on the Senate floor at around 11:45 this morning.

Similarly, the agreement to extend expiring tax cuts did not require lawmakers to offset any of the revenue lost, either by levying new taxes or reducing federal benefit programs. That would pump federal deficits over that period, already projected to total an astronomical $7 trillion, even higher. “It’s a significant tax relief measure and of course you know how Republicans like to cut taxes,” Senate Majority Leader Mitch McConnell, R-Ky., told The Associated Press. That wouldn’t sink the deal, he said. “We are trying to be as positive as possible because we must keep government open,” Pelosi told reporters on Wednesday. “But we are going to make a knowledgeable vote about it.” The Senate Democratic leader, Harry Reid of Nevada, said on the chamber’s floor on Wednesday that the deal was imperfect but a “good compromise” that would protect middle-class Americans and boost the use of clean energy. THE IRS FILES: As expected, lots of Washington spent lots of Wednesday figuring out what exactly was in the 2,242 pages worth of omnibus and tax extenders bills.

Another Republican win in the bill is a provision prohibiting the Securities and Exchange Commission from requiring publicly traded companies to disclose their political contributions. Our Katy O’Donnell examines one of the issues, quite important in the tax world, that fell under the radar in the early headlines — the rider barring the IRS from issuing new rules governing social welfare groups with a political mission. But tax experts have long maintained that the year-by-year extensions are bad policymaking because they leave businesses guessing whether their provisions will be extended that year, adding uncertainty and making it more difficult to plan for the future. But campaign finance advocates say the provision essentially means that this White House won’t be putting forward any new rules, even though the IRS’s tea party controversy kicked off less than four months into Barack Obama’s second term.

Pelosi huddled with the Congressional Progressive Caucus and the Tri-Caucus, a group of Asian Pacific, Hispanic and black lawmakers, who expressed their deep unease with the legislation. A tax on medical devices would be suspended for two years, a levy on health insurers would stop for one year and, in a victory for unions, a tax on higher-cost insurance policies would be postponed two years until 2020. Asked whether she planned to vote for the fiscal legislation, she said, “You bet I am.” Industry sectors were among the beneficiaries in the massive bill.

Democrats get the five-year extension they coveted for clean-energy tax breaks, while fending off provisions that would have denied federal dollars to Planned Parenthood, blocked entry of all Syrian refugees and torpedoed new regulations to protect net neutrality. Democrats failed to block GOP language restricting federal reimbursements to insurers losing money on federal and state exchanges where people buy coverage. Chamber of Commerce: “The Chamber has been urging Congress to make permanent many of these perennially renewed tax provisions for years, if not decades.

Some of the proposals that did make it into the bill are regrettable, such as a well-intentioned but poorly written measure to improve cybersecurity information-sharing that may also increase government surveillance. It’s simply honest budgeting going forward.” “We don’t score them because economic growth helps them. … We’ll get that back multiple times over in economic growth,” said Republican Study Committee Chairman Bill Flores of Texas, later adding that the tax breaks that are “niche, for a particular industry,” are extended only for a short term. This accomplishment cannot be overstated.” BUT WAIT, THERE’S MORE: If you’re going to call for more taxes on the wealthy, who better to join you than billionaire investor Warren Buffett, who has an actual rule for tax hikes on the rich named after him? But while it’s a far from perfect bill, it marks the return of a better approach to governing — one that eschews pointless threats in favor of a search for middle ground. Hillary Clinton, the Democratic front-runner, pulled that off in Buffett’s hometown of Omaha, Neb., on Wednesday, accepting Buffett’s endorsement in the process.

Joe Barton pointed out that part of the package includes a boon for his Texas constituents who pay more sales tax than income tax: the state and local sales tax deduction. “I’m not a big fan of wind and solar [tax credits], but I’d still rather see dollars stay in the American economy than come to Washington, D.C.,” said Rep. 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. AP Congressional Correspondent Erica Werner and Associated Press writers Stephen Ohlemacher, Andrew Taylor, Mary Clare Jalonick and Matthew Daly contributed to this report. As the WSJ notes, the tax extender deal would put the kibosh on those sorts of deals, unless a company sought a ruling from the IRS before Dec. 7 — which is exactly what Hilton did. ** A message from the American Suntanning Association: Nearly 10,000 small business owners (70% women-owned) in the tanning salon industry have closed their doors since the 10% tan tax was included in the ACA, and the tax eliminated more than 80,000 women-held jobs.

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. However, Pelosi and her leadership team is telling the rank and file that if they don’t provide 118 votes, they will end up with permanent business tax breaks, and a yearlong continuing resolution at a lower spending level — a far worse outcome for Democrats. Tax reform cheerleaders, however, will also note that a tax package that reduces rates for certain industries actually goes against the very purpose of comprehensive tax reform, which is to broaden the base, get rid of special interest loopholes and lower the rate for everyone. “I’m not fine with it.

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. It’s a deficit buster, but you know we’re going to have to back small businesses, so we might as well do the right thing for them” right now, said Rep. 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. Treasury to provide technical assistance to the island by authorizing the department to help the island government with areas like budgeting and cash management. Ryan said in a statement that he’s instructing House committees to “come up with a responsible solution” to Puerto Rico’s fiscal crisis by the end of March.

More than 167 of the 246 House Republicans voted against a budget bill in October. “I probably am not going to be able to get there,” said Republican Representative Trent Franks of Arizona, citing concerns including the lack of language dealing with some of his efforts to restrict abortion. The spending measure would scale back a program that allows visa-free entry to the U.S. for citizens of about three dozen countries, including much of Europe.

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 application 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.

Twitter-news
Our partners
Follow us
Contact us
Our contacts

About this site