Lawmakers agreed on a $789 billion plan for government spending and tax cuts. It was a compromise between everyone, hoping to save/create 3.5 million jobs. Hopes are that President Obama will sign it by Valentine's Day.
“We had to nip and tuck and cut here and cut there and modify here and shape there,” said Senate Finance Committee Chairman Max Baucus. “We had a long way to go to get to $789 billion, believe me.”
One of Obama’s proposals, a plan to provide a $500 payroll tax cut to individuals and $1,000 to families, got pared down. Under the compromise, there will be $400 for individuals and $800 for families in tax cuts. Retirees and disabled veterans who don’t pay payroll taxes will receive a one-time only payment of $250.
Lawmakers had to compromise a proposed $35 billion plan to increase home sales. The Senate wanted to double a $7,500 tax credit for homebuyers but under the compromise plan, that credit would only be increased to $8000. This, of course, does not help people already in homes.
A proposal to boost the auto industry through tax breaks to new car buyers, to write off interest on their loans, stands at $9 billion. I think auto and homeowner interest should be write offs, but only one each.
A proposed business tax cut that would have allowed companies to convert losses into tax refunds was almost entirely axed because it would have cost $67.5 billion over the next two years. Too much money.
Lawmakers dropped provisions that required companies accepting money from the government’s Troubled Asset Relief Program to repay the cash portions of bonuses topping $100,000. Too bad. That should have stayed.
The bill will spend $59 billion to increase aid to the unemployed by extending unemployment benefits by 20 weeks and increasing weekly benefits by $25. The subsidy to help unemployed people continue buying health insurance from their former employers will be increased.
There is $29 billion for highway construction projects, $7 billion to expand access to broadband and $11 billion to renovate the nation’s electrical grid. There will also be $15.6 billion for Pell college tuition grants, $8 billion for rail projects, $5 billion to weatherize low-income homes (to save money spent on heating and cooling) and $4.5 billion to make federal buildings more energy efficient as well.
There will be “Buy American” rules for materials used in construction that are able to avoid violating existing international trade agreements.