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The Senate Finance Committee's jobs bill

PH2010020201669.jpg

The Senate Finance Committee has released a draft (pdf) of its jobs bill, called the HIRE Act. If you've been following along, that might sound strange to you: Wasn't the jobs bill coming from Byron Dorgan and Dick Durbin? Well, yes, but the Finance Committee wants control of the process, so it's trying to muscle its way in front of them. And look how they did it:

While not addressed in the proposals in this package, there are two process agreements that are essential to completing action on it. Fulfilling these agreements has been a condition precedent to the bipartisan discussions that have occurred. First we will work to ensure that the scope of the Finance Committee package retains its bipartisan character. Second we are committed to timely consideration of permanent bipartisan estate and gift tax reform.

In other words, in order to get Republic cooperation on an $80 billion jobs bill, Democrats have promised them estate and gift tax reform, which will come to many hundreds of billions of dollars. This is the compromise that appears to have led to this package: not a better or bigger or more tax-focused jobs bill, but massive tax cuts for the rich.

Tell me again why Democrats are bothering with a bipartisan jobs bill rather than running the legislation through reconciliation?

Photo credit: Cliff Owen/AP

By Ezra Klein  |  February 11, 2010; 11:28 AM ET
Categories:  Economic Policy  
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Comments

Idiots.
This is the one where you propose a good, populist bill and then let the Republicans filibuster, not the one where you need to get it passed so bad you accept any corrupt piece of pork you can get through.

Posted by: adamiani | February 11, 2010 11:36 AM | Report abuse

Wow. I don't think a fiction writer could script a Democratic majority that behaved like this. Audiences would find it too unbelievable.

Posted by: cog145 | February 11, 2010 11:47 AM | Report abuse

spinal and testicular implants needed for senate democrats. I am sickened by their shameless pandering to the radical conservative wing of the senate. Don't they see that the repiglicans are lucy with the football? Doesn't 3 months of fruitless bargaining in the gang of 6 in the finance committee that didn't get them a SINGLE REPIGLICAN VOTE tell them that repiglicans are not being good faith partners in legislation? Fool democrats once shame on repiglicans, fool me twice, shame on senate democrats. There are lots of other folksy truisms that apply to this situation, but I am not going to say them all here. I voted for democrats to get things done, not whine about not getting repiglican support. They had 6 years to pass what they wanted and drove the economy into the ditch. Why listen to them now?

Posted by: srw3 | February 11, 2010 11:47 AM | Report abuse

for i think the first time ever I agree with adamiani and srw3. If all this is true and comes to pass its very bad. Fiscal conservatism cannot be a choice. It has to be applicable to ALL programs and projects.

One step forward, two steps back.

Posted by: visionbrkr | February 11, 2010 11:54 AM | Report abuse

Please, God, No. Don't let this guy do what he did to the Health Care bill! People didn't vote for democrats for bipartisan bills. We want bills that help the average americans, not those who worry about estate tax and gift tax. We never saw any bipartisanship during the previous administration or republican congresses. Republicans will never return favor when they get back in power. All efforts for bipartisanship over the past year has failed miserably, and democrats have been primarily blamed for those failures. Ask Max Baucus to take a hike this time. He has had his chance to demonstrate bipartisanship. He failed and derailed the entire health-care passage by allowing Snowe to delay and delay. He and we got screwed. He is terrible as a leader. Do not let him lead unless democrats want to fail again.

Posted by: achena | February 11, 2010 11:56 AM | Report abuse

How many of Dem pols benefit from these tax cuts? I'd guess a few. This way they can say it was done to garner bipartisan support - it covers them. Or is that awfully cynical.

Posted by: mbsz | February 11, 2010 11:58 AM | Report abuse

Someone please help me pick up my jaw from the floor.

Posted by: scarlota | February 11, 2010 12:00 PM | Report abuse

ARGH!

For goodness' sake, I'm sure we can get Republicans to increase the deficit so that they can give tax breaks to rich people. That is basically their philosophy of governing: jack up the deficit to finance tax cuts for rich people.

The challenge on that bill would be getting 20 Democrats to go for it. Make this THEIR problem, not ours.

The jobs bill should just be done through reconciliation. You could definitely get 50 Dems to put aside their deficit concerns and vote for jobs when unemployment is at 10%.

IDIOTS.

Posted by: theorajones1 | February 11, 2010 12:06 PM | Report abuse

This is really quite unbelieveable... except that it's the Democratic Party, so we should have expected it. Why are they "dealing" on the Estate & Gift Taxes? They cause a larger hole in the budget, and benefit the rich. What exactly is Populist about that?

More evidence that we are a fading country. It's staggering to think the Baucus could have been one of the Men Of The Moments in these two years, using his "moderate" rep to help give cover for pushing a progressive platform to help avoid the decline and fall of the empire. Instead, he's happy to play the fiddle while our Rome burns.

It's quite possible that he, like many of his brothers in Congress, is a very, very, very stupid man whose vision of the future is just massively in error.

I don't think he's stupid. I think he just doesn't give a crap, as is the case with many of his brothers in Congress. They simply care about getting re-elected and lining their own pockets. Their future is short term, little more than the balance of their political careers and their lives. They'll get theirs, and don't care if the rest of the country gets anything, or what they leave behind.

John

Posted by: toshiaki | February 11, 2010 12:06 PM | Report abuse

One more add:

After the Dems gets their asses kicked in November, the remaining members of the Senate Caucus need to seriously rethink Leadership and the Committee concepts. The majority of the Caucus needs to realize that they've been sold out this year by the old power brokets like Baucus, Conrad, Lieberman and even Reid. Harry will be gone, so they won't have to worry about that. But they really need to retake their caucus, and that means throwing people like Baucus and Conrad out of committee chairs.

Will it piss off the Baucus and Conrad's of the caucus? Sure. But committee chairs need to realize that they need to follow the party's platform and agenda rather than choke it off. There are plenty of younger members of the caucus who would be happy to lead rather than choke.

John

Posted by: toshiaki | February 11, 2010 12:11 PM | Report abuse

Democrats are imposters and liars.

Obama is incompetent.

Enough said.

Posted by: Lomillialor | February 11, 2010 12:13 PM | Report abuse

Corruption and general wimpiness?

Posted by: simmonslcsw | February 11, 2010 12:20 PM | Report abuse

So what's next on the agenda of the Senate democrats? A formal investigation of Barack Obama's citizenship? How about proposing a constitutional ban on gay marriage, or pushing to privitize social security?

Posted by: mrlooney | February 11, 2010 12:20 PM | Report abuse

No, no, NO!

But is there an out here? The statement says "Second we are committed to timely consideration of permanent bipartisan estate and gift tax reform." Could it be that they have agreed to "consider" such proposals, that is, to allow discussion of them ... but then vote them down?

I always keep the flames of hope burning. But we've been burned one too many times, and the flames are truly flickering low.

Posted by: JJenkins2 | February 11, 2010 12:24 PM | Report abuse

"This is the compromise that appears to have led to this package: not a better or bigger or more tax-focused jobs bill, but massive tax cuts for the rich."

Yay! I'm starting to like Democrats, now. They look good, rolling over for the Republicans like that.

I would have preferred to see a tax cut for working Americans, but the Democrats seem unable to put their complaints about "tax cuts for the rich" into a plan that creates tax cuts for everybody else. Which would seem the obvious strategy. Instead of going along with (while complaining about) tax cuts for the top 10% of Americans, offer a dramatic reduction in taxes for the bottom 90%. Not perfect, but it would make the "tax cuts for the rich" complaint really ring true. Otherwise, Democrats appear to be simply against tax cuts, period, and if they are, they should say so. The "for the rich" modifier is unnecessary, because, generally, they don't support any kind of tax cuts for anybody.

Alas, estate and gift tax cuts aren't useful for stimulation of economic growth. A capital gains tax cut might make more sense, if you're truly from the conservative school of economic stimulus. But I'm glad the Democrats are volunteering to be voted out of office next November.

Posted by: Kevin_Willis | February 11, 2010 12:29 PM | Report abuse

"Tell me again why Democrats are bothering with a bipartisan jobs bill rather than running the legislation through reconciliation?"

Tell me again why any Democratic senator expects to keep his job next year? Or the year after?

At this point I would much, much rather have Republicans from Montana and Nebraska in those seats. At least you'd know where you stood.

Posted by: NS12345 | February 11, 2010 12:31 PM | Report abuse

Good god, the Dems are even incompetent at being bought-and-paid-for morally corrupt intellectual disasters.

Get the Republicans back in there, to show them how it's done!

Another dose of tax cuts and deregulation could destroy the nation completely.

All together, a disgusting set of human beings.

Posted by: Lee_A_Arnold | February 11, 2010 12:42 PM | Report abuse

Wow, that is an absolutely HORRIBLE political compromise.

I thought centrist Democrats like Baucus were supposed to be concerned about deficits.

Posted by: al444 | February 11, 2010 1:06 PM | Report abuse

Well something needs to be done about the estate tax. Under the Bush tax cut in 2001, the exclusion was raised from $1 million to $3.5 million over 2001-2009 and then the tax disappeared in 2010. It comes back in 2011 at the old exclusion ($1 million). The House passed, just before the end of the year, a bill to keep it permanently at $3.5 million. Since the Senate failed to do anything, the goal now is to pass something and make it retroactive so the tax doesn't completely disappear in 2010.

The GOP obviously doesn't want the exclusion to go back to $1 million and neither do most Dems. It is a great issue to try to get some GOP cooperation. Why they are wasting that leverage on a jobs bill, however, is the real puzzle. Why not use it for something that really can't go thru reconciliation?

And yeah anything you do with the estate tax will be scored by CBO as adding big to the deficit because current law is the $1 million exclusion. But no one really cares about the deficit, that should be obvious by now.

Posted by: BChaplin62 | February 11, 2010 1:25 PM | Report abuse

Why does anyone let Baucus do anything after the way he handled healthcare?

This feels like an episode of Gilligan's Island:

Oh, it looks like they're about to get off the island, but the professor just handed the cord to Gilligan. I see where this is going...

Posted by: rpy1 | February 11, 2010 1:58 PM | Report abuse

Ezra (or anyone who knows): Procedural question:

Now what happens to the Dorgan - Durbin proposal? Shelved? Competes with this one? What?

Posted by: onewing1 | February 11, 2010 2:26 PM | Report abuse

BC Chaplin is right. As of now, there is NO estate tax this year. Next year it reverts to a $1 million exclusion, which is the cost of a nice house in CA. Towards the end of the year this creates an incentive to -ahem- accelerate the death of a rich loved one so s/he dies this year not next.

So there does need to be some sort of estate and gift tax reform so that some taxes can be recovered on estates of this year's decedents and a significant amount next year. The House compromise was probably the max we were going to get. But yes, the issue is what it should have been traded for. Something which it would be harder to paint the GOPers as the Scrooges they are.

Posted by: Mimikatz | February 11, 2010 2:30 PM | Report abuse

"Tell me again why Democrats are bothering with a bipartisan jobs bill rather than running the legislation through reconciliation?"

There is a rule of the Senate that says bills or amendments which would increase the deficit are out of order. It takes 60 votes to waive the rule.

David Waldman (no relation he only has one n) explains http://tinyurl.com/bjeajb
the fiscal 2008 budget resolution section 201 which sure claims to be binding even now.


IIUC this has nothing to do with reconciliation. An effort by the Democrats to pass a jobs bill without Republican support could be stopped not by a filibuster but by a point of order.

Since the rule is in a budget resolution it might have been changed and maybe it can be changed via reconciliation and then the jobs bill can be passed via reconciliation. The IIUC above is very necessary.

Also note the Senate can't just cut the estate tax. That would require the Senate and the House and Obama or 2/3ds of both houses. Senate Democrats can't give back the farm (which doesn't actually happen to exist since no farms have been sold to pay estate taxes in recent history and farmers would get their special loophole even when the throw mommma from the train act of 2001 expires http://tinyurl.com/yhyop3b).

I haven't read the thread. If others up thread have mentioned

Posted by: rjw88 | February 11, 2010 2:39 PM | Report abuse

visionbrkr says one step forward and two back.

The Democrats have certainly taken some backward steps - probably more than two. I assume mean the republicans have taken that one step forward?

Posted by: Ami_Blue1 | February 11, 2010 3:27 PM | Report abuse

I like what they called this on Salon.com

"Senate jobs bill: A band-aid for a gaping chest wound"

Posted by: burndtdan | February 11, 2010 3:38 PM | Report abuse

And it's gone! Heh. REJECTED by Sen. Reid. Thankee, sai.

Posted by: roquelaure_79 | February 11, 2010 5:06 PM | Report abuse

Wow. Was that link from The Onion?

It appears the goal of Senate Democrats is to alienate as many voting blocs as possible. If it was for a noble cause, maybe then it would be excusable. Sending the deficit soaring further on a too-small-to-matter jobs bill by cutting a tax that probably has the smallest impact on incentives of any of the taxes? What are these people thinking?

File this under 'trying to please everybody and pleasing no one'.

Posted by: justin84 | February 11, 2010 5:12 PM | Report abuse

At least I feel even better about laughing when I got a call from the Democratic Party wanting a contribution. Contribution for what? Tax cuts for the wealthy? For a complete lack of leadership, vision and understanding of our nation's problems. I refuse to lift one finger for these fools any longer.

Posted by: alan24 | February 11, 2010 8:17 PM | Report abuse

Kevin,

What do you propose in the way of "dramatic" tax cuts for the bottom 90%. Looking at CBO's numbers, most of the middle has effective tax rates (Income and SS/Medicare) of around 10%, after all the deductions, credits, etc...How low do you want to take the effective rate?

Posted by: truth5 | February 12, 2010 9:49 AM | Report abuse

In regards to the estate tax, it needs to be done anyway (the current rate is 0%) so it actually would be a tax hike, not a tax cut, at least for 2010. Obviously would be a cut after that. The House already passed it, raising the exemption to $3.5 million. If they can use the leverage of the estate tax to get a better jobs bill, than so be it. Don't really see that as being an issue.

Posted by: truth5 | February 12, 2010 9:56 AM | Report abuse

Truth5,

You could lower marginal rates for the 'rest of the middle' - you know, single people who rent, are out of school and don't have children. Just a 401(k), which given the current budget trajectory is largely Roth. I'm a long way away from six figures and my effective federal tax rate this year is about 19% including only my portion of FICA and 26% including my employer's portion.

In all honestly the level of taxes I face really isn't that burdensome, and things are going well for me so I don't need any 'help'. No need to increase the deficit on my account (and for the record, about half of any tax savings are probably going to head into the Roth). Just saying if someone did want to provide middle class tax cuts, there are still some of us who pay a decent amount in taxes, and in the long run I think it would be best to get marginal rates down to the lowest level needed to fund the government.

Posted by: justin84 | February 12, 2010 10:07 AM | Report abuse

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