On Dec. 13, 2011 the U.S. House of Representatives passed H.R. 3630 -The Middle Class Tax Relief and Job Creation Act of 2011, by a vote of 234-192. H.R.3630 includes extending the payroll tax cuts demanded by President Obama, with a provision that calls for the speedy approval to build the Keystone XL pipeline, which would produce an estimated 20,000 much-needed jobs immediately upon approval, with an additional hundreds of thousands of jobs created in related areas of employment in the near future. To out-of-work Americans struggling to provide for their families during the current recession, the approval of the KXL pipeline should appear to be an easy decision. President Obama, however, has taken a different view, in the fact that he has threatened to veto the tax relief extension, along with the unemployment benefit extensions all because H.R. 3630 contains the KXL pipeline provision.
Breakdown of H.R. 3630
House Speaker John Boehner details H.R. 3630 from his Speaker’s blog, that contains the following bullet points:
The Middle Class Tax Relief & Job Creation Act (read the bill | summary) up for a vote this week extends the payroll tax break for working families and extends and reforms federal unemployment insurance (UI) benefits – as requested by the president. It also includes job creation initiatives supported by President Obama in his economic plan, such as:
ENCOURAGING JOB CREATORS TO INVEST & GROW: The bill extends 100 percent business expensing through 2012 to make it easier for employers, small and large, to invest now in new machinery and equipment, grow their businesses, and create new jobs. [see the president’s plan] EXPANDING ACCESS TO HIGH-SPEED WIRELESS: The measure includes spectrum auctions to advance wireless broadband service, bring interoperable broadband communications to public safety officials, spur billions in private investment, and create thousands of jobs – consistent with Rep. Greg Walden’s (R-OR) Jumpstarting Opportunity with Broadband Spectrum (JOBS) Act. [see the president’s plan] Other job creation provisions included in the bill would speed up approval of the Keystone XL energy project – which has broad bipartisan support – and stop excessive federal regulations that threaten job growth. Speaker Boehner said, “It is my hope that the president will accept this measure so that Americans can see that we are still capable of working together to the meet the challenges we face.”
The Heritage Foundation outlines the six provisions of H.R. 3630 and summarizes it’s final costs in an article from The Foundry. Here are their bullet points on H.R. 3630: (shortened versions)
Title I of the bill gets the government out of the way of a pipeline project so the private sector can create some jobs. It includes approval of the KXL pipeline project, forcing the EPA in issuing new rules governing commercial and industrial boilers, to allow reasonable time for development and implementation of the rules. In addition, Title I of the bill encourages job-creating investment by extending for another year the option for immediate tax deductibility of certain capital asset purchases.
Title II of the bill extends for a year the employee payroll tax reduction. Title II also extends the unemployment compensation program, but with appropriate reforms to help the unemployed find jobs and to begin to tailor the overall program to changes in the economy. Title II extends for two years the forestalling of sudden automatic cuts in Medicare payments to physicians that would otherwise occur under the law (often called the “Doc Fix”). The bill also extends for a year the Temporary Assistance to Needy Families program, one of the 70 federal welfare programs in need of integrated reform (see H.R. 1167/S. 1904).
Title III of the bill contains reforms to the federal flood insurance program that previously passed the House of Representatives on a bipartisan basis. Among other things, the bill adjusts the financing of the program to improve its actuarial soundness.
Title IV of the bill addresses the use of spectrum for communications purposes, including public safety purposes. Although a market-oriented approach to allocating public spectrum for public safety users would encourage efficient use of spectrum more than the bill’s approach of allocating dedicated spectrum to them, the bill uses market mechanisms to good effect in many of the other spectrum-related provisions.
Title V of the bill takes some action to reduce the increase in the federal deficit.The bill increases the mortgage guarantee fee Fannie Mae and Freddie Mac charge for taking on the credit risk of loans, and takes a small step — small in comparison to the scope of the Medicare reforms needed but in the right direction — to adjust the Medicare program. Perhaps most importantly, the bill recognizes a new Medicare principle that, if the Government continues to subsidize premiums for Medicare beneficiaries, only those beneficiaries who have an economic need for the subsidy should receive it; thus, the bill increases the Medicare premiums paid by high-income beneficiaries, an element of the Heritage plan for Saving the American Dream. Title V of the bill also increases over time the amounts that Members of Congress and federal employees pay into their retirement programs and adjusts the basis on which the programs calculates retirement benefits. In addition, Title V reduces federal spending by eliminating for 2013 cost of living adjustments for Members of Congress and the federal civilian workforce. In the category of minor oddities, Title V imposes a 100% tax on excess unemployment compensation paid to millionaires; it would seem more appropriate for Congress to prevent receipt or require return of benefits, rather than imposing a tax to recover the funds.
Title VI of the bill makes technical changes to payment of corporate estimated tax, timing of certain fee payments in international trade, Senate procedure, and budget-scoring of the legislation after enactment.
The Congressional Budget Office reported that “enacting H.R. 3630 would change revenues and direct spending to produce increases in the deficit of $166.8 billion in fiscal year 2012 and $25.3 billion over the 2012-2021 period.”
Check out the all-important last line in The Foundry’s article about H.R. 3630. It increases the deficit by $166.8 billion dollars in 2012, then adds another $25.3 billion dollars a year to the federal deficit for the next 10 years!
In summary we see that Speaker Boehner once again lays out the lovely-sounding Middle Class Tax Relief and Job Creation Act of 2011 as “giving away” tax relief and creating jobs while ignoring the deficit increases inherent in this bill. What part of the limited government by deficit and debt reduction mandates [that was given to the GOP by We the People in the 2010 mid-term elections] does Mr.Speaker not understand here? While H.R. 3630 gives President Obama and Harry Reid’s Senate Democrats everything they have demanded by way of increased debt-spending, this bill looks more like political theater than it does anything else. Does Speaker Boehner think that true conservatives are somehow going to be pleasedwith the billions of deficit increases in this bill?
Barack Obama says he will veto it so he can pander to the green-weenies that demand we increase our dependency on foreign oil while sitting on trillions of barrels of oil and trillions of cubic feet of natural gas, resulting in the now-famous “skyrocketing electricity prices” Obama previously promised us. Add to that the fact that Senate obstructionist Democrat Harry Reid claims that this bill is DOA in the Senate, and we are truly, once again on the infamous bridge to nowhere, as far as moving this country forward is concerned.
All which has lead to the following headline: Government Shutdown Possible This Weekend from Taegan Goddard’s Political Wire:
“Prospects for a year-end congressional compromise on key tax and spending legislation grew more complicated,” the Washington Post reports, “as the Republican House passed a controversial version of a payroll tax cut extension despite a veto threat from the White House.”
“The increasingly contentious tax dispute threatens to derail what had been an emerging compromise on separate legislation to fund the government through next September, raising the specter of a possible government shutdown this weekend if the conflict is not resolved by Friday.”
2012 just can’t get here fast enough!