U.s. Senate Set to Vote On Strategy to Extend Unemployment Benefits
The chamber is slated to vote today on the legislation that would also provide $25 billion in aid to states, extend a package of miscellaneous tax cuts, temporarily ease corporate- pension funding requirements and prevent cuts in Medicare reimbursements to doctors.
A proposal to impose a 50 percent tax on bonuses awarded last year to Wall Street executives was dropped.
The bill, partially financed by offsetting savings, would add $97 billion to the governments budget deficit, according to the Congressional Budget Office.
“This is not just some technical bill — this measure helps real people,” said Senate Finance Committee Chairman Max Baucus, a Montana Democrat.
Yesterdays vote to advance the bill was 66-34; those voting no included one Democrat.
The bill represents Democrats second major effort this year to boost the economy. A separate $18 billion plan to offer companies a tax break for hiring the jobless is awaiting approval.
The centerpiece of the measure currently before the Senate would extend provisions offering the jobless as many as 99 weeks of unemployment assistance averaging $300 per week along with a 65 percent subsidy to help buy health insurance through the federal Cobra program.
Exhausted Benefits
While the legislation would prevent millions from exhausting their benefits this year, it wouldnt spare all. According to the National Employment Law Project, a half-million Americans could burn through all of their allowable assistance by August.
“Were trying to give enough time to people on the chance they find something, but we know how hard it is,” said Senator Dick Durbin of Illinois, the chambers No. 2 Democrat. “These poor people — I cant imagine what lies ahead for them. In my state, there are not many options out there and theyre all awful — people end up homeless, some of them struggle in soup kitchens and pantries trying to survive.”
The measure would renew a series of tax breaks for businesses and individuals that expired Dec. 31, including a research credit backed in the past by Microsoft Corp., Amgen Inc. and Boeing Co. It would renew a break that allows companies like General Electric Co. to defer U.S. taxes on profits from financing sales of equipment in overseas markets.
For individuals, the bill would renew a deduction for state and local sales taxes that could be used instead of the deduction for state and local income taxes. Some states, including Texas and Florida, dont have an income tax.
It would extend a $250 deduction for teachers who buy their own classroom supplies, and tax credits for installing energy- efficient windows, doors, and skylights that meet 2010 Energy Star standards.
To help offset its cost, the bill would give the Internal Revenue Service more tools to attack tax shelters by more precisely defining when tax-avoidance transactions lack economic substance.
It also would prevent paper companies from claiming a tax credit for producing fuel from a byproduct of the pulp-making process known as “black liquor.” The IRS issued a ruling last year that congressional analysts said opened the door for abuses, although companies have expressed little interest in claiming the credit.