House Dems Push Tax Breaks Through Committee

Amid grim new evidence of economic weakness, legislation at the heart of President Barack Obama's recovery plan advanced in Congress Thursday over the persistent opposition of Republicans seeking deeper tax cuts.

"We are very pleased with the progress," said Speaker Nancy Pelosi, D-Calif., after $275 billion in tax cuts cleared the House Ways and Means Committee on a party-line vote of 24-13. Democratic leaders have promised the measure will be ready for Obama's signature by mid-February.

"It will create jobs immediately, and it will also lay the foundation for economic stability as we go forward," Pelosi added.

But Republicans said there was no reliable estimate of the bill's impact on employment.

"The American people deserve to know what they are getting for their nearly $1 trillion," said Rep. Dave Camp of Michigan, the top Republican on the tax-writing committee.

In all, the measure costs $825 billion, a total expected to grow as it makes its way through Congress.

On the key vote of the day, Democrats closed ranks to preserve a tax break for this year and 2010 that would mean $500 for many workers and $1,000 for millions of couples, including those whose earnings are so low that they pay no federal income tax.

Democrats also turned back a Republican attempt to jettison a new federal subsidy to help laid-off workers pay for health insurance after they lose employer-paid coverage, and to waive income taxes on unemployment benefits for two years.

They argued that the GOP proposals would favor upper-income individuals and couples who, they said, benefited disproportionately from tax cuts passed during the administration of former President George W. Bush.

"We need to be dealing with people at the bottom of the income scale," said Rep. Jim McDermott, D-Wash. He also noted that the legislation would provide a $25-per-week increase in unemployment benefits.

But Camp cited a report by the nonpartisan Congressional Research Service that he said showed lower- and middle-income workers already would have received most of the benefits from the proposal to eliminate the tax on unemployment benefits.

Separately, the House Energy and Commerce Committee approved a $2.8 billion program that would expand broadband service into underserved areas. It also approved various programs costing an estimated $27 billion to promote energy efficiency.

The panel, working late into the night, also passed a $20 billion effort to speed the creation of electronic health records, and it approved more money to help states afford increased enrollment under Medicaid, the health care program for the low income. In all, the additional spending for health care programs totals about $150 billion over five years.

During a recession, enrollment traditionally rises in programs such as Medicaid, food stamps and unemployment insurance as workers lose their jobs and their incomes.

Congressional committees did their work as government reports showed the number of newly laid-off Americans filing jobless claims and the pace of home construction both posted worse-than-expected results. Additionally, Microsoft Corp. said it would slash up to 5,000 jobs over the next 18 months, while chemical maker Huntsman Corp. said it would cut more than 1,600 employees and contractors combined.

Democrats have an oversized majority on the tax-writing committee, as they do on all committees, the result of election gains in the fall. While Republicans sought several changes in the legislation, the proceedings were devoid of drama or even emotion.

Republicans in both the House and Senate are developing alternatives to the Democratic legislation, and Rep. John Boehner of Ohio, the GOP House leader, announced a meeting next week with Obama.

"Our plan offers fast-acting tax relief, not slow-moving and wasteful government spending," he said, referring to a study by the Congressional Budget Office questioning administration claims the money could be spent fast enough to reduce joblessness quickly.

The administration countered with a promise that 75 percent of the entire measure would reach the economy over the next year and a half, according to a letter sent by White House Budget Director Peter Orszag to top lawmakers.

Not all Democrats were completely pleased with the legislation making its way to a vote on the House floor next week.

The portion of the measure ticketed for highway and bridge construction, $30 billion, is far less than some favor, and there was grumbling.

"This bill ... is not even near what we need for short-term needs and it does not in any meaningful way address the long-term needs for our country," said Rep. Peter DeFazio, D-Ore., although he added, "It is better than nothing."

There was outright opposition in the House to another element of Obama's economic recovery program, but it was entirely symbolic.

On a vote of 270-155, lawmakers voted to block use of the remaining $350 billion in the financial industry bailout created last fall. Among the opponents were 99 Democrats.

The Senate cleared the way for Obama to use the money last week, so the House vote was little more than a chance for individual lawmakers to vent their opposition. Some Democrats took advantage of the opportunity. "There's a massive transfer of wealth going on, taking money out of the pockets of the American people and putting it into these banks. This has to stop. We have to stop," said Rep. Dennis Kucinich, D-Ohio.

The tax cuts that won committee approval included a $500 credit for workers making up to $75,000 per year. Couples with incomes up to $150,000 a year would receive a $1,000 credit. Individuals with incomes up to $100,000 and couples earning up to $200,000 would qualify for lesser tax breaks.

The Republican alternative envisioned a different approach.

It called for reducing the current 10 percent bracket to 5 percent, affecting a taxpayer's first $8,350 in income, and lowering the existing 15 percent bracket to 10 percent, covering income from $8,351 to $33,950.

The legislation that cleared committee also would provide a temporary $2,500 tax credit to help pay for college, and includes breaks to encourage the production of renewable energy resources.

For businesses, the measure includes $29 billion in tax cuts to encourage investment in new plants and equipment, and to permit money-losing firms to claim refunds on taxes paid up to five years ago, during profitable times.

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  • by WellSaid Location: NC on Jan 27, 2009 at 07:50 AM
    Obama Snake Oil, you hit it right on. The Chosen One makes no mistakes and the rules don't apply to him. T minus 4 years.....
  • by Dave Location: Wilson on Jan 26, 2009 at 08:21 PM
    How does reducing taxes on individuals create jobs? You ceate jobs by reducing company costs(taxes). Then they can use that money they would have been paying in taxes and spend on labor costs (new workers). The math and logic is simple but apparently half of the people in this country do not understand. We have raised a entire generation of morons and the Dems are proud of it.
  • by MrT Location: LaNC on Jan 26, 2009 at 04:25 PM
    Not all the people that voted for Obama are saying they made a mistake, because they are ashamed to admit it. They know he is a loser,but they were ticked off at Bush. So what did they do? They voted for the two losers, Obama and Biden, just to try and pay the Republicans back. Of course, you also have all the anti-war crybabies that want to sit back and let the terrorists attack at will, and not respond. There is a word for that. It is called COWARDS!They were probably the ones getting kicked around on the playground. Why? Because thay wouldn't fight back and defend themselves.So they voted for the gutless Democrats, because McCain had too much guts to suit them.
  • by Obama Snake Oil Co Location: Washington on Jan 26, 2009 at 09:57 AM
    For all those jobs lost to overseas, thank Bill Clinton. For those addresses for companies overseas, well, thank Bill again. For the mess with mortgages, thank democrats Chris Dodd and Barney Franks. Now that we are selling our country out to the chinese, thank "the chosen one" and the houses. I really would like to see Obamas cabinet get a little more crooked, you just can find enough scandal and corruption for me. LOL, you voted for em, enjoy.
  • by Tad Location: Jamesville on Jan 26, 2009 at 06:56 AM
    Sorry Refluter, I may have been a little too harsh in this instance. It just seemed that you were taking a stand against people being dead beats and riding the welfare system, which is a commendable position, but apoligizing for doing it. By all means, if you don't consider yourself a liberal please elaborate on any other positions that you take on issues that would not be considered liberal. Please be mindful, do not state a liberal position and call it moderate. You don't have enough position yet to redefine terms.
  • by Blog Refuter Location: NC on Jan 25, 2009 at 11:37 AM
    Tad, the problem is, you read comments, but you don't understand them. Do you remember that skill taught in school called reading comprehension? You may need to brush up on it. I'll remind you that my last statement says that people can have as many babies as they like as long as they can support them. If you want to conclude anything from my comment, conclude that I support a timetable and other visible restraints on non-disabled people receiving federal assistance. If you need any clarifications, please feel free to ask rather than assume. You know what they say about people who make assumptions. The only difference is, in this case, you're only doing it to yourself. Obviously, neither you nor I, at present, are in government. So you just have to keep hoping that the system gets better. Now, keep watching tennis kiddo.
  • by Tad Location: Jamesville on Jan 25, 2009 at 06:07 AM
    Blog Refluter, you are begging people not to stay lazy and take advantage of the system. I can tell you what they would say to your "soft, dainty" approach. They would say "shut up and give me my benefits". You won't beg your way out of this problem, beta. You put a boot in their backside and cut off benefits after a reasonable time. You also don't increase benefits for another baby. Sound harsh, maybe so, but it you give them more for having another baby, they will have another baby....and another...and another. We have to be stronger than you refluter, and just say no.
  • by Blog Refuter Location: NC on Jan 24, 2009 at 08:21 PM
    I'm not a liberal. I'm a moderate. However, since a few Ultraconservatives love to classify me as one, I purposefully find fault in every hypocritical statement they make. I'm liberal on some issues and conservative on others. No one sensible would like for well-bodied people to purposefully remain on welfare. It is understood that misfortunes happen, but you must rise above your failures. When you're down, you shouldn't wish to stay down. Some people don't have motivation. I support the implementation of programs which would provide motivation and classes on admirable job skills to those on welfare. Also, those on welfare should do some planning. If you're receiving federal aid, please do not get a baby. The American people have been so gracious to help you in your time of need. Why would you see the necessity to add another burden on your fellow citizens? This isn't to sound like eugenics in any manner. People can have as many children as they like as long as they can support them.
  • by william Location: rocky mount on Jan 24, 2009 at 03:57 PM
    Who was it during the campaigns that said we were a "nation of whiners"? You know, the more I think about it the more I think he was right. No matter who takes office the opposite party followers begin complaining immediately. No matter what government action is taken, half the country disagrees. No matter how much money we make we always want more. We buy crap we never use and throw it away later so we have an excuse to buy new crap we still don't need. We gripe about our job being a pain while we ride by the full parking lot at the employment office. We curse people for driving like idiots while we talk on the phone in the other lane. We complain about tax increases and go out next week and buy a $50,000 Suv or 4wd truck. This whole country needs to look in a mirror and really, really think.
  • by Anonymous on Jan 24, 2009 at 12:17 PM
    "I don't think anyone should be barred from achieving the American dream if they're willing to work". See?..inside of every liberal theres a concervative trying to come out! lol

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