12/11/2010

Obama tax deal being larded up with special interest gifts to win Democrat congressional votes

At what point will the Republicans jump ship? Even if they like that the current tax rates are generally continued, at what point does all this committed future spending become too much? It seems that the Republican House won't require all this special interest favors to pass the bill after they take over in January. The Democrats currently have massive majorities in both the House and Senate, and they have had two years to work on this with Obama and two previous years to work on this when Bush was president, but the Democrats in the congress have waited until the last minute.

The tax deal, reached behind the scenes and still informal, now includes ethanol subsidies for rural folks, commuter tax breaks for their cousins in the cities and suburbs and wind and solar grants for the environmentalists -- all aimed at winning votes, particularly from reluctant Democrats.
The holiday additions are being hung on the big bill that was Congress' main reason for spending December in Washington, long after the elections that will give Republicans new power in January. The measure will extend Bush-era tax cuts, averting big tax increases for nearly all Americans, and keep jobless benefits flowing.
Republicans generally liked that agreement, worked out by Obama and GOP leaders. Democrats generally didn't, hence the add-ons. . . .

Almost $5 billion in subsidies for corn-based ethanol and a continuing tariff to protect against ethanol imports were wrapped up and placed on the tree Thursday night for farm-state lawmakers and agribusiness lobbyists. Environmentalists won more grants for developers of renewable energy, like wind and solar.
For urban lawmakers, there's a continuation of about-to-expire tax breaks that could save commuters who use mass transit about $1,000 a year. Other popular tax provisions aimed at increasing production of hybrid automobiles, biodiesel fuel, coal and energy-efficient household appliances would be extended through the end of 2011 under the new add-ons.
The package also includes an extension of two Gulf Coast tax incentive programs enacted after Hurricane Katrina to spur economic development in Mississippi, Louisiana and Alabama.
The ethanol money was added despite a growing congressional opposition to subsidizing the fuel after decades of government support. Last month, 17 Republican and Democratic senators wrote to leaders calling the tax breaks "fiscally indefensible," since there's already a law in place that requires ethanol be blended into gasoline. . . .


Even if the pork may be aimed at Democrats, there are apparently a few Republicans who are quite happy with it. Senator Chuck Grassley is among them.

The Senate's tax bill will include a 45 cent-per-gallon ethanol tax credit for one more year, through the end of 2011, a spokesperson for Senator Chuck Grassley (R-IA) told Agriculture.com at Thursday evening.
The tax credit is in the draft of the tax extension bill the Senate is expected to vote on soon, said Beth Pellett Levine.
The law will also reinstate the $1 a gallon biodiesel tax credit, retroactively for 2010 and through 2011, she said. . . .

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2 Comments:

Blogger 24thIndependent said...

You realize now that all that tough talk about fiscal responsibility during the election was just talk, right? This deal is rotten for Democrats, for Republicans, for independents who have any real sense of principles. It's catering to the power interests on both Left and Right. So much for integrity in the congressional revolution of 2010.

12/11/2010 10:34 AM  
Blogger John Lott said...

That is one reason that I was asking: "At what point will the Republicans jump ship?" If you read my pieces at Fox News you would realize that I am less than thrilled by this bill, right? Take this example from a few days ago:

http://www.foxnews.com/opinion/2010/12/07/does-president-obama-understand-economics

12/11/2010 2:19 PM  

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