The bail out bill passed by the Senate adds $149 Billion to the original $700 Billion package. It is hoped that these additions will attract “Yes” votes in the House, but, it may cause some fiscally conservative House members, who previously had approved the $700 Billion bail out, to switch their vote to “No.”
The Senate package includes:
- Repeal for a year of the Alternative Minimum Tax (first drafted to make sure that the superrich pay some income taxes, but now set to hit more than 22 million additional Americans if Congress does not act); This repeal would spare 24 million households from a $62 billion alternative minimum tax.
- Extend $17 billion in benefits to companies that produce alternative energy.
- Disaster relief (for Hurricane Ike).
- Temporary increase the limit on federal insurance for bank deposits to $250,000 from $100,000.
- A new property tax deduction of up to $1,000 for homeowners who do not currently itemize deductions on their federal income taxes. (Advocates say 30 million people would be eligible for the benefit.)
- Deductions for tuition and education expenses, and deductions for sales tax in states that do not have an income tax.
- A clean-energy tax package; and tax-break extensions, such as the popular research-and-development tax credit.
- Deductions for sales tax in states that do not have an income tax.
- Film and TV programs receive a $344 million tax break.
- Motorsports racing track facilities get a tax break of $140 million.
- 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., receives $132 million of tax incentives to attract investment to the District, and
- A mental health parity bill.
The Democrats “Blue Dog Coalition,” a fiscally conservative group, has previously blocked legislation to repeal the Alternative Minimum Tax (AMT), because the proposed legislation did not have provision to pay for the repeal. The Senate version of the bail out tacks this same AMT legislation to the bail out package.
Paul Blumenthal on the Sunlight Foundation blog writes, “In classic congressional fashion, the Senate has decided to use a crisis piece of legislation as a way to push through a massive package of other priorities forcing an inter-chamber factional battle to come to a head.”
According to The Hill, Of the Blue Dogs’ 49 members, 23 voted for the bill Monday. Because of the added $149 Billion in the Senate version — with no provision to offset any of this expense — the support of these Blue Dog Democrats in now in question.
The New York Times reports that Charles B. Rangel, Democrat of New York and the chairman of the Ways and Means Committee, said the Senate was setting a bad precedent by trying to impose its tax legislation on the House. Rangel is quoted as saying, “The Senate leadership took an unprecedented gamble when they attached a package of tax extenders to the emergency financial rescue legislation”
