Washington Post reports on the Democrats latest $143 billion “jobs” bill, which even after being scaled down to secure votes from “fiscal hawk” Democrats will add $84 billion to the deficit.
The bill would extend (again) jobless benefits through November, and put off (again) cuts in Medicare reimbursement rates. It also includes another $24 billion to bail out state governments and their public employee unions, and could see the last minute addition of $23 billion more targeted specifically for teachers unions.
Yet the bill features a wide array of earmarks in the form of preferential tax treatment for pet industries, including
. . . a $38 million extension of a depreciation break for “certain motorsport entertainment complexes,” otherwise known as the NASCAR break. And television and film producers would reap an expensing provision worth $46 million over 10 years.
Puerto Rican and Virgin Island rum manufacturers would receive excise tax breaks worth $131 million over 10 years; a second Puerto Rican manufacturing break is worth $185 million. American Samoa would receive a payment worth $18 million “in lieu of (an) economic development credit,” according to the bill. The bill also extends trade protections for the domestic cotton industry.
The watchdog group Taxpayers for Common Sense singled out $96 million in alternative energy incentives that would help the fledgling liquid coal industry. “Subsidies for a risky coal-to-liquids technology that will have no short-term impact on job and could cost billions in taxpayer dollars should not be included in any jobs or tax package,” the group wrote to congressional leaders. “As the total cost of this bill inches up, lawmakers must trim the fat on costly provisions that do little to stimulate the economy.”
In a particularly glaring bit of budget gimmickry and opportunism, the spending is partially funded through an increase in the “Oil Spill Liability Trust Fund” tax.
UPDATE: Over at The Foundry, Curtis Dubay has much more on the bill:
They have reduced the amount of spending in the most cynical fashion possible – by cutting the number of years over which the spending would occur. Of course, they have every intention of extending the spending again when the current extensions expire.
The irresponsible overspending in the tax extenders bill is not the only fatal flaw of the legislation. The $43 billion of tax increases included in the bill to offset part of its cost will slow the recovery of the fragile economy. Even worse, Congress is once again in such a rush to pass a bill it isn’t bothering to figure out the broader impact these tax hikes, especially those affecting U.S. businesses operating abroad, could have on the economy and the competitiveness of United States businesses that operate internationally.
Of greatest concern in this regard are the proposed reductions of the foreign tax credit that would severely curtail the ability of United States businesses that operate internationally to avoid double taxation and will drive countless more jobs – and even corporate headquarters — overseas. That’s for sure. But what isn’t certain is how much damage would be done. The troubling changes to the foreign tax credit came out of the clear blue sky. No one, including Congress and the businesses that would be affected, has had time to get a handle on how the provisions would operate or the broader impact they will have on the United States’ international competitiveness.
The changes to the tax treatment of S-corporations included in the bill raise significant concerns because there has been no analysis of the economic impact they will have either. On Tuesday, President Obama referred to himself as a “fierce advocate” for small business. If he signs legislation containing these tax changes, small businesses are going to wonder who, with fierce advocates like this, needs tame enemies.