On January 1, 2013, a perfect storm of major federal policy shifts are set to occur. The Bush tax rates are scheduled to expire, raising taxes on all income earners. The debt-ceiling trigger -- assuming the supercommittee gridlocks -- would go into effect, causing massive cuts to government across the board. And a host of other tax credits important to businesses and the middle class are scheduled to expire as well. It's no coincidence that all of this is happening right after the 2012 elections. It's designed, on some level, to facilitate a grand bargain to extend the status quo that can be passed by an unaccountable lame-duck Congress (and possibly President), with the maximum amount of time before voters will get another chance to weigh in.
Ryan Grim has a fantastic piece outlining how things may go down:Read Full Article
On jobs, Congress is probably not going to do anything. On deficits, however, expect Congress to act. It's an unfortunate situation. Without congressional action on jobs, the unemployment rate is expected to stay around 9% -- or even get worse -- until 2014 or so. But on deficits, if Congres doesn't act the problem will basically take care of itself. As the CBO explained recently, under current law, annual deficits are on track to shrink from where they are today (8% of GDP) to about 1% of GDP by 2015. That's because Congress' of the past created policies with expiration dates and controls that were designed to prevent them from being perpetual drains on the budget. For example, the 2003 Bush tax cuts were passed under special rules that make it easier for the majority party to overcome minority opposition for controversial legislation, but, in exchange, require the legislation to expire after 10 years. Other examples include the Alternative Minimum Tax and the formula the government uses to reimburse doctors under Medicare, both of which are "patched" by Congress year after year so that they don't end up raising taxes too much or reducing doctor pay.
The problem, however, is that doing nothing and letting these sunsets and budget controls do their job is that it would mean more of the burden would get shifted to people and interests groups with money and political influence. For that reason, Congress is not likely to keep their hands off.Read Full Article
The Democrats' epic cave-in on the Bush tax cuts is now complete. Late Thursday night, by a vote of 277-148, the House of Representatives approved a deal brokered by President Obama and congressional Republicans to extend, for two years, the Bush tax cuts for all income levels in exchange for a one-year extension of the filing deadline for federal unemployment insurance. Because the version passed by the House is identical to the bill passed by the Senate earlier this week, it will be sent to Obama immediately and is expected to be signed into law later today.Read Full Article
UPDATE 4: After more than 6 hours of delay, the Democrats passed a slightly revised rule by a 214-201 vote. The new rule doesn't change how many or which amendments will be voted on, it just allows for a separate up-or-down vote on the bill even if the estate tax amendment passes. The original rule would have deemed the bill passed once the amendment is passed.
Original post below. I'll be rolling updates on this post, so check back again shortly for more (and follow along on Twitter)...
The House Rules Committee met last night to hammer out the rule that will govern today's House debate of the Obama-GOP tax bill, and, as expected, they're protecting it by allowing only one amendment vote. There will be no votes on letting the upper-income tax rates expire, making the payroll tax provision less regressive, lengthening the unemployment insurance filing extension, or adding an extra tier of benefits for the 99ers. The only vote allowed will be on an amendment to raise the estate tax from the Senate's very low level to the almost-as-low 2009 level as set by Bush, and House leaders are whipping against this because they don't want to have to send the bill back to the Senate.Read Full Article
The Senate is now in session and they are about to start voting on Obama's plan to extend the Bush tax cuts for all income levels in exchange for extending unemployment benefits for 13 months, and some other stuff. It's expected to pass easily and will be sent to the House for follow-up action, probably on Wednesday. House Democrats have pretty much given up on the idea of walking away from the deal, which they almost unanimously disapprove of, and letting the tax cuts expire. Instead they will hold votes on amendments and see if a majority can agree on any changes. If not, they'll pass it as is.
National Journal explains how the House will choose amendments to vote on:Read Full Article
If congressional leaders have their way, this will be the final week of the 111th Congress. President Obama and most Republicans are hoping the Democrats will end their four years in the majority by passing a full extension of the Bush tax cuts for all income levels. To that end, the Senate is set to take a big cloture vote this afternoon on an amendment to the House's bill to allow the tax cuts to expire for income over $200,000 (H.R. 4853) that would change the bill to extend all the tax cuts, lower the estate tax, extend unemployment benefits, and lots more. If today's vote passes, as is expected, the bill will be sent back to the House by Tuesday evening for follow-up action. That's where things become less clear.Read Full Article
Hot on the heels of Rep. Sheila Jackson-Lee's [D, TX-18] statement Thursday on the House floor that an extension of unemployment insurance for 99ers should be added to Obama's tax deal, the Congressional Black Caucus has announced that adding 99ers relief is essential for winning the support of their members. "The CBC has reached a consensus on three areas that we believe we can unite behind, Rep. Bobby Scott [D, VA-3] said at a press conference on Friday. "First, we support the 13-month extension of unemployment insurance benefits, but we all agree that we also ought to extend benefits for the so called 99ers -- those who are exhausting the benefits they have."Read Full Article
Finally, a sign that at least someone in the crew of House Democrats leading the revolt against Obama's tax deal with the Republicans is fighting to add additional weeks of unemployment benefits. In a floor speech yesterday calling for "a reasoned conversation," Rep. Sheila Jackson-Lee [D, TX-18] argued that a middle-income tax relief package should include a new tier of unemployment insurance benefits for those who have exhausted all available benefits. Jackson-Lee is among the 53 Democrats who signed a letter expressing opposition to the Obama tax deal.Read Full Article
Late Thursday, Senate Majority Leader Harry Reid [D, NV] unveiled the final version of the Obama tax cut deal and scheduled a vote for Monday morning to start the debate. The bill contains all of the big items I outlined earlier this week -- a two-year extension of all Bush tax cuts, one-year extension of unemployment insurance, a payroll tax holiday, etc. -- but it also contains dozens of smaller tax items designed to sweeten the deal and secure support of wavering Democrats. Many of the new tax additions are in the area of renewable energy, which David Dayen point outs is what the Bush Administration put in the TARP bill to get it through the Senate.Read Full Article
Dec. 9th, 10:30 pm ET - as per the news sources cited on our micropublishing account, the Senate is adjourned until tomorrow, with no roll call votes planned. Sen. Reid announced that a first cloture vote on the tax deal will be held 3pm Monday. As of tonight, Cox radio reporter Jamie Dupree has led the way with his summary of the tax deal.
Earlier: the Senate rejected cloture for the Defense Authorization bill (S. 3454 - aka #NDAA), which includes a repeal of "Don't Ask, Don't Tell" (aka #DADT). Details of how the vote went down on the Twitter machine.
Full #NDAA roll call details will be available Friday Dec. 10th... there's no technical reason why vote results can't be available in real-time, except that CSPAN and the Library of Congress refuse to make their data fully open. If you appreciate our user-friendly explanations of the baffling vortex that is the U.S. Senate, please make a tax-exempt donation. Updates ongoing tomorrow.
Previously: in a nearly unanimous internal caucus vote this afternoon, House Democrats made it clear that they're not going along with the tax cut deal that Obama has negotiated with Republicans. Click through for the background as we work to make the legislative wrangling of the past 24 hours more clear.Read Full Article
President Obama on Monday announced the "framework" of a deal with congressional Republicans for dealing with the looming expiration of the Bush tax cuts. It's a two-year deal, and it includes a bunch of other stuff, all at a cost about $900 billion. None of it is offset, so this will be a direct increase in the deficit. Let's take a look at the specifics of what's included:Read Full Article
Every Monday morning when Congress is in session I post the schedules for the week ahead in the Senate and the House, and I'll do that below with one big caveat: the real action in Congress this week while be the off-the-floor, behind-the-scenes wrangling on extending the Bush tax cuts. Democrats and Republicans are closing in on a deal to extend, temporarily, the Bush tax cuts for all income levels.Read Full Article
Even as details leak out about a deal in the works between President Obama and both parties in Congress to temporarily extend all of the Bush tax cuts, the Senate was in session Saturday to hold votes on two Democratic proposals on how to deal with the issue. Needless to say, they both failed. But the roll call results tell us a good deal about where the debate over taxes and, more generally, the deficit stands, so let's have a look.Read Full Article
On Tuesday afternoon, Democrats called on the Senate to pass the Unemployment Insurance Stabilization Act under the expedited unanimous consent procedure. As expected, Sen. Scott Brown [R, MA], acting on behalf of all Republicans, objected and will force a full-fledged debate on the issue that will likely last several weeks and be rolled together with unrelated tax issues. Federal unemployment benefits expire today for millions of long-term unemployed workers.Read Full Article
Federal unemployment insurance, which provides a lifeline for millions of long-term unemployed workers, expires today, and from here on out it's going to be harder than ever for the Democrats in Congress to pass another extension.
The Republicans have officially begun chipping away at the Democrats' majority in the Senate. Republican Mark Kirk was sworn in Monday, taking over for Democrat Roland Burris as the junior Senator from Illinois and knocking the Democrats' Senate majority down to 58. Kirk has made his opposition to the Democrats' plans for extending unemployment benefits clear, saying on Fox recently that he would vote against any extension that is not offset by new revenue.Read Full Article