Senate expands on House version of economic relief bill

by: Chris Bowers

Wed Jun 09, 2010 at 11:57


It's hard to believe, but the House is now emerging as more of a problem to progressive governance than the Senate.

Just as it did on Wall Street  reform, the Senate looks ready to outperform the House on the economic relief bill (variously called the tax extenders bill and unemployment extension bill).  After the Blue Dogs successfully managed to slash the House version of the bill by $79 billion, the Senate version that is being debated on the floor has restored $27 billion of that funding, and done so in mostly positive ways:

The Senate will resume consideration Wednesday of a tax cut and benefit extension bill.

The package has grown from the $113 billion that was approved by the House several weeks ago to a Senate package that now costs $140 billion.(...)

One of the changes the Senate made to the House-passed bill increased Medicaid assistance to state governments by about $24 billion.

Senators will also be able to offer amendments to the bill during the debate, so the final version is not set.  It could get stronger (with, for example, the addition of COBRA), or it could get weaker.  Both Harry Reid and Charles Schumer express confidence that the bill will pass next week, without any significant weakening amendments, but then again Democratic leaders always express that sort of confidence.

Because the bill has been changed from the House version, there will also have to be a conference committee between the House and Senate  now. So, this fight will continue even after the bill passes the Senate next week.

Combine this with the Wall Street reform conference committee, and it is time to turn away from elections for a bit, and focus on the hard slog of governing.  We should all make sure to enjoy this time, even while we agitate as hard as possible to improve the various pieces of legislation under consideration.  These next couple months are going to be the last time for a while that Democrats will be governing with such a large majority, and we need to make it count.

Chris Bowers :: Senate expands on House version of economic relief bill

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Carried interest? (4.00 / 1)
Senate is weakening the House's version of the tax despite it being one of the few, easy-to-sell progressive revenue streams, as demonstrated by the following article: http://www.thedailybeast.com/b...

Citizens for Tax Justice has a great piece on all this (PDF warning): http://bit.ly/bF84gf

From the report:

""Carried interest" is a portion of profits promised to certain people who manage investment funds. The "carried interest" loophole allows these fund managers to pretend that some of this compensation is actually capital gains, which is taxed at a top rate of 15 percent and not subject to payroll taxes, whereas wage compensation is generally taxed at a top rate of 35 percent and is always subject to payroll taxes. The end result is that these investment managers (who sometimes earn hundreds of millions of dollars in a year) can pay taxes at lower rates than their secretaries."


re: senate (0.00 / 0)
Senate weakens bid to tax Wall Street like rest of us

Senate Democrats Tuesday weakened efforts to end a controversial Wall Street tax break, watering down a bid to raise taxes on managers of hedge funds, private-equity funds, venture capital firms and other business partnerships.

The Senate action retreated from a step taken last month by the House of Representatives, where lawmakers voted to get tough with Wall Street financiers, an apparent bow to election-year pressure from constituents outraged that some captains of finance were taxed at lower rates than their secretaries are.

Currently, managers of these investment funds are compensated with a share of the fund's profits, referred to as "carried interest." This compensation is taxed as a capital gain, and the capital gains tax is now 15 percent.

Senators scaled back the House plan to tax as "ordinary income" some 75 percent of the fund-income these managers receive. Instead, the Senate would trim the tax hit to 65 percent, and 55 percent for assets held longer than seven years.

http://www.mcclatchydc.com/201...

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