This morning, Carl Hulse of the NYT reported that a bipartisan jobs bill was well-placed to make its way through the Finance Committee:

Senators Max Baucus, Democrat of Montana and chairman of the Finance Committee, and Senator Charles E. Grassley of Iowa, the panel’s senior Republican, released a draft $85 billion plan that would give employers a payroll tax exemption for hiring those who have been unemployed for at least 60 days. The bill would also provide a $1,000 income tax credit for new workers retained for 52 weeks. (A draft of the bill is available here.) The measure, which is scheduled to be reviewed by Senate Democrats this afternoon, also seeks to spur capital investment by extending tax benefits, by providing a federal subsidy for bonds issued for public works projects, and by taking steps to improve highway and transit construction. Jobless benefits and health care coverage for the unemployed would also be extended in the measure. The costs of the bill would be offset by closing tax loopholes and shifting some money to be made available for future improvements in the Medicare program.

I was a little skeptical on reading this description, and apparently Harry Reid was also miffed, though for different reasons, as Alexander Bolton of The Hill reported later today.

The bill now include four components: tax credits for employers who hire new workers; a provision allowing businesses to write off the cost of capital investments; Build America Bonds, which allow state and local governments to lower their borrowing costs; and a one-year extension of funding for transportation programs in the Surface Transportation Act.
Baucus had stuffed the bill with many provisions that Democratic senators thought went beyond the goal of creating jobs, such as $31 billion in extensions to expiring tax provisions, including the research and development tax credit. That and other tax cuts were included to win GOP votes.

As my friend Matt Frost noted earlier today, the small government right tends to like sunset provisions. But it turns out that they’re an incredibly bad idea. If a research and development tax credit is a good idea that’s worth the revenue hit, make it permanent. Expiring tax provisions feed the lobbying trade — “tax-extenders” feed on the political process, extracting rents by wielding the threat of non-renewal. Incredibly, the tax-extenders just kick the can down the road another year. What could possibly be the reason for a one-year extension if not to create yet another opportunity one year from now for elected officials to hit up donors and lobbyists to keep racking up billable hours?

I don’t like the estate tax — it strikes me as an inefficient way to raise revenue. But we either make its elimination permanent and make up the revenue hit by ending other loopholes and deductions, or we keep it in place. So I’m sympathetic to Reid’s move, despite the fact the rest of the bill is far from problem-free.