Friday, October 03, 2008

House Passes Bailout Package; Taxpayers Be Damned; President Bush Signs Into Law

The $700 billion bailout package was passed by the House a short time ago. The version that passed the house included dozens of unrelated provisions, including AMT inflation adjustments, and multiple tax credit and extenders that helped smooth the way to pass the bailout, despite the fact that no one could adequately explain how and why we're throwing up to $700 billion at a problem, the cause of which remains unfixed.

This has plenty to do with Rep. Barney Frank and other Democrats who refused to deal with the massive problem over financial industries and pushing affordable housing to those who could never repay because they had poor credit or bad credit.

I'm no fan of Bill O'Reilly, but he's dead on holding Frank's feet to the fire over his inability to oversee the very entities - Freddie and Fannie - that pushed subprime lending in the name of affordable housing.

Now, President Bush is expected to sign this bill into law, and so this sorry chapter goes. The underlying problem remains unaddressed, but plenty of taxpayer money is going to be doled out.

It would figure that Democrats are claiming that Sen. Obama helped push them to vote for the plan. Where was he last week when the prior iteration of the bill, minus all the pork, was defeated? This bill is essentially unchanged from the prior version except for the addition of the 340 pages of tax extenders, sweeteners, the hurricane relief, and mental health provisions tacked on to the bill to ensure its passage. These provisions helped make this bitter pill more palatable:
Sec. 101. Renewable energy credit.
Sec. 102. Production credit for electricity produced from marine renewables.
Sec. 103. Energy credit.
Sec. 104. Energy credit for small wind property.
Sec. 105. Energy credit for geothermal heat pump systems.
Sec. 106. Credit for residential energy efficient property.
Sec. 107. New clean renewable energy bonds.
Sec. 108. Credit for steel industry fuel.
Sec. 109. Special rule to implement FERC and State electric restructuring policy.
Subtitle B—Carbon Mitigation and Coal Provisions
Sec. 111. Expansion and modification of advanced coal project investment credit.
Sec. 112. Expansion and modification of coal gasification investment credit.
Sec. 113. Temporary increase in coal excise tax; funding of Black Lung Disability
Trust Fund.
Sec. 114. Special rules for refund of the coal excise tax to certain coal producers
and exporters.
Sec. 115. Tax credit for carbon dioxide sequestration.
Sec. 116. Certain income and gains relating to industrial source carbon dioxide
treated as qualifying income for publicly traded partnerships.
Sec. 117. Carbon audit of the tax code.

Sec. 201. Inclusion of cellulosic biofuel in bonus depreciation for biomass ethanol
plant property.
Sec. 202. Credits for biodiesel and renewable diesel.
Sec. 203. Clarification that credits for fuel are designed to provide an incentive
for United States production.
Sec. 204. Extension and modification of alternative fuel credit.
Sec. 205. Credit for new qualified plug-in electric drive motor vehicles.
Sec. 206. Exclusion from heavy truck tax for idling reduction units and advanced
Sec. 207. Alternative fuel vehicle refueling property credit.
Sec. 208. Certain income and gains relating to alcohol fuels and mixtures, biodiesel
fuels and mixtures, and alternative fuels and mixtures treated as qualifying income for publicly traded partnerships.
Sec. 209. Extension and modification of election to expense certain refineries.
Sec. 210. Extension of suspension of taxable income limit on percentage depletion
for oil and natural gas produced from marginal properties.
Sec. 211. Transportation fringe benefit to bicycle commuters.

Sec. 301. Qualified energy conservation bonds.
Sec. 302. Credit for nonbusiness energy property.
Sec. 303. Energy efficient commercial buildings deduction.
Sec. 304. New energy efficient home credit.
Sec. 305. Modifications of energy efficient appliance credit for appliances produced
after 2007.

Sec. 306. Accelerated recovery period for depreciation of smart meters and smart grid systems.
Sec. 307. Qualified green building and sustainable design projects.
Sec. 308. Special depreciation allowance for certain reuse and recycling property.

Sec. 401. Limitation of deduction for income attributable to domestic production
of oil, gas, or primary products thereof.
Sec. 402. Elimination of the different treatment of foreign oil and gas extraction
income and foreign oil related income for purposes of the foreign tax credit.
Sec. 403. Broker reporting of customer’s basis in securities transactions.
Sec. 404. 0.2 percent FUTA surtax.
Sec. 405. Increase and extension of Oil Spill Liability Trust Fund tax.
The fact is that this bill passed not on the merits of doing something to bail out the financial industry or saving the American economy, but because it gave everyone something - after all, if someone was in a contested race, who was going to vote against the AMT relief portion?

Here's the roll call: 263-171. 172 Democrats and 91 Republicans voted for the bill. 63 Democrats and 108 Republicans voted against.

New Jersey Reps, Bill Pascrell Jr. (D) and Rodney Frelinghuysen (R) [ED: Added the political affiliation because I wouldn't want to play name that party as anonymous emailer pointed out] voted for this package, after rejecting the prior version. Why did Pascrell vote for the bill:
Pascrell said the bill improved since Monday, most notably because the Senate on Wednesday added the extension of dozens of tax breaks that had expired this year. Most prominent among them was a $62 billion cut in the Alternative Minimum Tax that will prevent 25 million taxpayers, including 880,000 in New Jersey, from facing an average tax increase of $2,000 each.

"If we had approved this legislation on Monday, we would not have been able to pass the tax extenders package," Pascrell said.

Frelinghuysen, R-Harding, cited the AMT patch, an increase in federal deposit insurance limits, the addition of a requirement that health plans provide "mental health parity," and the need to restore confidence in financial markets in explaining his vote.

"This package asks a great deal of the American people, and I believe it is important to extend assistance to them as well," Frelinghuysen said.
Not because the bailout was necessary, but because of all the attached legislation.

A short time ago, President Bush signed this bill into law.

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