Specter Sells Out!
John A. Quayle
blueoval57 at VERIZON.NET
Thu Feb 12 17:36:21 MST 2009
[Folks, forgive the language, but this is truly what you call a
"power-whore." - JAQ]
Stimulus Sellout: 3 Gop Senators Slashed Billions in Tax Cuts; Specter Got
Thursday, February 12, 2009 6:32 PM
By: David A. Patten
The gang of three liberal Republican Sens. Arlen Specter, Olympia
Snowe, and Susan Collins who handed President Obama the stimulus bill he
so desperately needed, apparently sacrificed billions in tax cuts during
final negotiations over the measure in order to reduce its cost.
The compromise bill which may be ready for President Obamas signature as
early as Monday also stripped Americas ailing businesses of tax benefits
and other incentives.
From auto dealers to the home-building industry, big business appears to
be the biggest loser in the final economic stimulus plan . . . The Wall
Street Journal online reported, noting that Democrats removed key tax cuts
and benefits for business as political payback for Republicans who failed
to support the plan.
Though Republicans who crossed party lines apparently got rewarded. The New
York Times reported Thursday that Sen. Specter got $6.5 billion for medical
research. The Senator is ailing from cancer.
The bill worked out in negotiations between the House and the Senate
reduced the tax cuts from 42 percent of the cost of the $838 billion bill
passed by the Senate, to just 35 percent of the $789.5 billion compromise
Correspondingly, the spending portion of the bill rose from 58 percent in
the original Senate measure to 65 percent.
Although the bill is still being tweaked, Congress is on the verge of
sending it to President Obama for his approval. Despite the drop in total
outlays, the legislations total cost is more than the entire cost of the
Iraq war since U.S. troops invaded in 2003.
Democratic leaders conferenced repeatedly Tuesday evening and Wednesday
with the three GOP senators, whose votes were critical to the bills
passage. Other Republicans complained bitterly that they were shut out of
Although Democrats continued to fine tune the details of the massive
spending bill on Thursday, key provisions of the legislation now include:
$514 billion in spending programs, compared to $275 billion in tax cuts.
The tax reductions are evenly split between cuts for business and cuts for
Democrats say the bill will now only save or create 3.5 million jobs, not
the 4 million originally touted.
States will receive $87 billion to help pay for Medicaid. Its less than
the Senate version called for, and states will still face huge Medicaid
deficits in the future.
The stabilization fund to help states stave off massive deficits and
layoffs rose from $44 billion to $53.6 billion. Thats more than the Senate
expected to spend, but far less than the $95 billion the House version
sought to dole out.
The bill helps General Motors Corp. avoid a $10 billion tax liability,
Bloomberg.com reports. The huge tax burden stems from GMs move to exchange
equity for reduced debt and union healthcare commitments. The equity swap
is necessary to qualify for $13.4 billion in loans extended by the federal
Homebuilders figure to be sorely disappointed. They hoped for a provision
that would allow them to apply recent losses against past taxes on profits
paid during the boom years, which would have resulted in tax refunds. It
would have cost $67.5 billion, and that price tag was too high.
Obamas plan to give workers a break on payroll taxes was cut back. It went
from $500 to $400 for individuals and from $1,000 to $800 for couples.
Individuals earning $75,000 and couples earning $140,000 are ineligible.
Many students will earn a $2,500 tuition tax credit. As with many of the
benefits, it is limited by income. The full benefit is only available to
those earning less than $80,000 (or less than $160,000 for joint filers.
The stimulus increases the earned income tax credit, on a temporary basis,
from 40 to 45 percent of earnings for families with three or more children
who have low incomes, CNN reports. This will cost $4.6 billion.
A $6.5 billion item for medical research pushed by Sen. Specter, a cancer
survivor. It will stay.
Unemployed workers would receive an additional 20 weeks of unemployment
compensation as well as health-care subsidies. Also, the weekly unemployed
benefit will rise from $300 to $325.
Obamas plan to give companies a $3,000 credit for adding jobs drew fire
from both sides of the aisle, and was jettisoned.
The proposed $15,000 tax credit as an inducement to buy a new home was
nixed. Instead, the bill will eliminate the requirement to repay an
existing tax credit for those purchasing a home for the first time, and the
size of that credit rose from $7,500 to $8,000. And that may change further
as the bill moves forward, sources say.
Folks on Social Security will receive a payment of $250, according to The
A general fund to help schools, which could go toward school construction,
rose from $39 billion to $54 billion in the bills latest iteration. School
funding was a key item sought by Obama.
Miscellaneous spending items included in the bill range from a boost in the
food stamp program ($16.5 billion), to rural access to high-speed Internet
Construction firms are big winners too: The bill includes an estimated $50
billion of infrastructure spending on roads and bridges.
A $2.3 billion fund called Temporary Assistance for Needy Families has been
created. It is essentially a new welfare program that will give cash to
those in need.
Democrats and President Obama say the bill will improve healthcare
nationwide. Some $19 billion is dedicated to health-information technology.
It offers doctors up to $64,000 in bonuses for digitizing their medical
There is a provision that would permit business to avoid taxes for a
five-year period on mergers and other deals they make that is designed to
clean up their balance sheets. Those tax savings would eventually have to
be repaid, however, according to The Wall Street Journal.
In a big break for smaller businesses, The Wall Street Journal reports that
companies with less than $5 million in annual revenues could apply their
current losses toward taxes paid in profits over the past five years.
A $5.3 provision will permit companies to accelerate depreciation for
capital items such as plants and equipment.
$8.4 billion for transit and $8 billion for high-speed rail.
Nearly $70 billion to shield middle-class households from the Alternative
Minimum Tax, which was designed to keep wealthy individuals from avoiding
There will still be tax breaks for buying a new car, but it will be harder
to qualify and the total money available dropped from $11.5 billion to $2
billion, The Wall Street Journal reports. On the other hand, CNNMoney.com
reports the measure allows those who buy a vehicle this year to deduct the
state sales and excise taxes, as long as the buyer earns less than $125,000
Ironically whats not clear, economists say, is whether the compromise
version will have the punch to create the jobs needed to begin moving the
nation toward economic recovery.
"It's a good plan, but I don't think it's good enough," said Mark Zandi,
chief economist at Moody's Economy.com, told the Wall Street Journal.
"Three million additional jobs are doable and likely; four million I think
will be a stretch."
But other GOP congressmen complained they were frozen out of the
negotiations over the bill, despite pledges by Obama and congressional
Democrats to be more open, transparent, and bipartisan. House Minority Whip
Eric Cantor, for example, said Republicans had been kept in the dark.
My question, Cantor told The Washington Times, is what is the majority
trying to hide by never allowing any ventilation of ideas, any discussion
of what we have brought forward as the Republican vision to stimulate this
As those remarks suggest, even as the battle over the stimulus bills
passage winds down, the debate over the soundness of its provisions and
whether its good or bad for the economy has just begun.
© 2009 Newsmax. All rights reserved.
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