Posts Tagged Hill
Tax chaos looms in wake of Boehner’s failed ‘Plan B’ proposal
By Bernie Becker and Peter Schroeder - 12/26/12 05:00 AM ET
The failure of House Speaker John Boehner’s “Plan B” could create chaos for taxpayers across the income spectrum.
With a slew of tax provisions scheduled to expire in less than two weeks, a dive off the fiscal cliff could also complicate the chances for a fundamental rewrite of the tax code — something top officials on both sides have said they want.
But with the clock ticking, some lawmakers aren’t so sure that their colleagues appreciate the possible upheaval if all current tax policies expire, even for just a few days or weeks.
“People have certainly been told,” said Sen. Kent Conrad (D-N.D.), who is retiring at year’s end and has spent much of the last two years pushing for a broad deficit deal.
“It’s always hard to know how people process what they hear, how much they really understand,” Conrad, the chairman of the Budget Committee, told The Hill. “Clearly the committees that deal with this, they understand.”
On Friday, President Obama called on Congress to pass a pared-down deficit reduction deal, extending tax rates for all but the highest income levels and extending unemployment benefits. At the same time, Obama added that policymakers could build off that measure with additional tax-and-spending measures.
That statement came a day after Boehner (R-Ohio) declined to put his proposal to lock in rates for annual income up to $1 million to a vote, after acknowledging that he didn’t have the support in the GOP conference to pass such a deal.
The Urban-Brookings Tax Policy Center has said that, all told, taxpayers would face more than $500 billion in larger bills in 2013 if Washington does nothing, from higher payroll taxes to increased individual tax rates to a broader estate tax.
All income tax rates, for instance, will rise on Jan. 1, with the top rate going from 35 percent to Obama’s preferred level of 39.6 percent. The top dividend and capital gains rates, now 15 percent, would shoot up to 39.6 percent and 20 percent, respectively.
The exemption for the estate tax would also shrink significantly, from roughly $5 million a person to $1 million, and the rate would rise from 35 percent to 55 percent.
Democrats, meanwhile, are fighting to keep stimulus-era expansions of tax breaks like the Earned Income Tax Credit, meant to help the working poor. Sevearl other targeted tax incentives are also scheduled to expire.
Figures from across the ideological spectrum have suggested many or all of those provisions could be dealt with retroactively, if it came to it.
But some changes would have an immediate impact on taxpayers. Obama’s most recent offer to Boehner, communicated before the Speaker shifted to “Plan B,” did not ask for an extension of the current 2-percentage point cut in the payroll tax.
Wall Street economists and the Congressional Budget Office have said that allowing that tax cut and expanded unemployment insurance to expire would drag down economic growth.
The IRS has also said that roughly two-thirds of 2012 tax returns could be delayed if Washington fails to roll back the reach of the Alternative Minimum Tax, a system meant to ensure that the wealthiest can’t legally evade paying taxes.
Congress did not patch the AMT for inflation when it was enacted, forcing lawmakers to routinely pass a “patch.” But the last patch expired at the end of 2011, and some 30 million more households could be hit by the tax for 2012 without congressional action.
With all that in mind, Sen. Olympia Snowe (R-Maine) said that, despite how the situation looks now, she doesn’t believe Congress and the White House would allow the economy to totally fall off the cliff.
“If you can’t do it now, how difficult is it going to be January 1st?” Snowe, who did not seek reelection this year, told reporters on Friday.
“You’re dealing with a new Congress, newly elected senators, members. It’s a whole new equation. It’s not going to be that easy to put the genie back in the bottle here.”
But top lawmakers on both sides of the aisle have expressed concern that politics could trump policy in the coming days.
Boehner, after being asked at a Friday news conference, declined to rule out bringing up a fiscal cliff measure that House Democrats would need to carry over the finish line.
Democrats in the chamber, meanwhile, urged Boehner to follow in the footsteps of Minority Leader Nancy Pelosi (D-Calif.), who as Speaker relied on Republicans to pass an Iraq War spending bill.
“It’s important that the Speaker put the good of the country above Republican House caucus politics,” Rep. Chris Van Hollen (D-Md.) said at a separate Friday news conference.
For their part, Boehner and other Republicans have said that, after “Plan B” went down, the burden was on Obama and Democrats to put together a deal that could make it through Congress.
“We all know it’s a disaster. We would like to solve it,” said Sen. Orrin Hatch (Utah), the top Republican on the Finance Committee. “Somehow, the president’s got to get in and say, ‘Yea, I’ll take this, I’m not going to veto this.’”
“I think they really want to go over the cliff, I really do. That’s pretty apparent to me,” Hatch added.
Allowing current tax policies to lapse would also underscore the challenge of tax reform, in which popular tax breaks and some supported by powerful lobbies would be put on the table as policymakers look for ways to streamline the code and lower rates.
But Sen. Ron Wyden (D-Ore.), a longtime fan of the last comprehensive tax revamp, from 1986, shot down any concerns that the late breakdown of deficit talks could complicate efforts to pursue broad tax reform in the coming year.
“We’re not doing tax reform bills in four days, but I think what’s going to happen between now and the end of the year positions us well for next year,” he said. “It’s obvious that both sides are going to keep searching for common ground and that’s the way it ought to be.”
- Tax chaos looms in wake of Boehner’s failed ‘Plan B’ proposal (thehill.com)
- Congress in Tizzy; One GOP Leader: Obama ‘Eager to Go Over the Cliff’ (bloomberg.com)
- Your financial cliff Q & A (dailyitem.com)
- Over the fiscal cliff: How hard a landing? (kansascity.com)
- Budget Showdown Leaves Taxpayers in Limbo Before Year End (bloomberg.com)
- Fear, finger-pointing mount over “fiscal cliff” – Reuters (reuters.com)
- Fear, finger-pointing mount over U.S. fiscal cliff (news.yahoo.com)
- Grand Bargain Shrinks as Congress Nears US Budget Deadline – Bloomberg (bloomberg.com)
- Budget deal showdown leaving taxpayers in Limbo before year end (bangordailynews.com)
- Sen. Barrasso: Obama sees a ‘political victory’ in going over the cliff (thehill.com)
Business groups grow frustrated over impasse in ‘fiscal cliff’ talks
By Vicki Needham - 12/23/12
Business leaders are growing increasingly frustrated with the lack of progress in talks to head off billions in looming tax hikes and spending cuts they say will harm the nation’s economy.
Concern increased among business groups following the failure of House Republicans to round up enough votes to pass their “Plan B” bill that would have stopped tax increases on anyone making $1 million a year or less.
“We’re not in a state of panic over last night because it was part of the process,” David French, the chief lobbyist for the National Retail Federation, told The Hill.
But “we’re nervous,” he said.
French argues though that while a deal at this point is logistically difficult, reaching an agreement would set a positive tone for the next couple of years when lawmakers will be forced to work together on comprehensive tax and entitlement reform.
Lack of a bipartisan compromise would be the “worst thing that can happen,” he said, as it would spell “two more years of political trench warfare.”
The stark reality of that possibility sunk in after lawmakers left Washington on Friday for the Christmas holidays with neither a broad bipartisan agreement nor a back up plan that could, at the very least, prevent more than $600 billion in tax increases and spending cuts scheduled to begin in January.
French said all of the sides must come together on a deal.
“House Republicans negotiating with themselves aren’t going to resolve this,” French said.
Through most of the month, business leaders sounded an optimistic chorus. And talks between Speaker John Boehner (R-Ohio) and President Obama did appear to make progress before Boehner moved to his backup plan.
But the latest news has shifted the mood among business leaders.
“There is incredible frustration,” said one source representing the business community who asked not to be identified.
Business owners across the country now feel like the last month has been “virtually wasted” with unnecessary political posturing when they “could have been at the table hammering away” toward an agreement, the source said.
“Our position hasn’t changed, we know what businesses want and we’re advocating for what they need, which is something that will offer growth.”
The White House and Capitol Hill have served as a virtual carousel for dozens of chief executives who have urged lawmakers and President Obama to craft a broad agreement that includes tax hikes, spending cuts and entitlement reforms.
Collectively, business groups generally have pushed for the sides to agree to a sizeable deficit-reduction package that also prevents tax hikes on most taxpayers. Big and small businesses have sometimes been at odds during the talks, with corporate CEOs offering more support for higher tax rates and small business groups arguing that would hurt their members.
Many hoped the talks could provide a framework for tax reform next year, something that has long been a priority for the corporate world.
- How Boehner’s Plan B Vote Imploded – NationalJournal.com (mbcalyn.com)
- Conservatives urge GOP leaders to be bold, prepare to go over cliff – The Hill’s On The Money (mbcalyn.com)
- Search for Way Through Fiscal Impasse Turns to the Senate – NYTimes.com (mbcalyn.com)
- Congress in Tizzy; One GOP Leader: Obama ‘Eager to Go Over the Cliff’ (bloomberg.com)
- How Party of Budget Restraint Shifted to ‘No New Taxes,’ Ever – NYTimes.com (mbcalyn.com)
- Boehner, White House vow to press ahead (kansascity.com)
- A Flaccid Boehner (skydancingblog.com)
- “Fiscal cliff” efforts in disarray as U.S. lawmakers flee (reuters.com)
- Conservatives urge GOP leaders to be bold, prepare to go over cliff (thehill.com)
- US ‘fiscal cliff’ vote abandoned (bbc.co.uk)
Graham to defense firms: Notify workers now of layoff threat from automatic cuts – The Hill’s DEFCON Hill
Graham to defense firms: Notify workers now of layoff threat from automatic cuts
By Jeremy Herb - 06/26/12 02:44 PM ET
Sen. Lindsey Graham (R-S.C.) called on companies to issue hundreds of thousands of layoff notices to workers threatened by an impending $500 billion in automatic defense cuts to highlight the danger of sequestration.
Graham told reporters Tuesday that the threat of job losses that’s set to hit in January is the only way to pressure lawmakers to actually act and reverse the cuts.
“We will do nothing until the layoff notices come,” Graham said of Congress.
“We wrote this stupid law, we should feel the effect of this stupid law. Don’t hide us from our stupidity,” he said, before adding that he voted against “this stupid law.”
Graham was referring to the Budget Control Act that passed in last year’s debt-limit deal, which set in motion roughly $500 billion in cuts to both defense and non-defense spending in January unless Congress can find alternate deficit reduction.
Nearly all Democrats and Republicans want to avert the cuts, but the two sides have deep disagreements over taxes and mandatory spending and have been unable to reach a deal.
Graham in recent weeks has begun talking about Republicans putting new revenues on the table, although he has not gone so far as to endorse raising tax rates, which Democrats are demanding.
The defense industry has tried to up the ante by threatening to issue layoff notices due to sequestration just days before the 2012 election, pointing to 60-day requirements under the Worker Adjustment and Retraining Notification (WARN) Act.
Graham said that the companies should issue the notices even sooner, because he believes that will spur Congress to act.
“I am calling on the business community to release the layoff notices in compliance with the statute as soon as possible,” he said. “I’m calling on the Pentagon to inform their civil employees this is the law of the land and you’re going to lose your job come January.”
- Lockheed Martin eyes layoffs this fall (politico.com)
- House approves East Coast missile shield site in $643 billion defense bill – The Hill’s DEFCON Hill (mbcalyn.com)
- The Guerilla Warfare of Pentagon Contractors (pogoblog.typepad.com)
- Layoff threats put Congress on notice – Politico (politico.com)
- Reid: I’m not backing off sequester (politico.com)
- Drastic action needed before Washington acts on military cuts, Graham says (stripes.com)
- Aerospace contractors ready to make cuts, if funding falls (mercurynews.com)
- Military-Industrial Complex Doles Out Threats on Trigger Cuts (news.firedoglake.com)
- DOD cuts: An election-year time bomb (thehill.com)
- Sen. Graham: GOP should break with Norquist tax pledge for grand bargain – The Hill’s Video (mbcalyn.com)
Facebook settles class-action lawsuit over ‘sponsored stories’ ads
By Brendan Sasso - 06/22/12 12:12 PM ET
Facebook has agreed to give users more notice and control over how their profiles appear in “sponsored stories” to settle a class-action lawsuit.
The company also agreed to pay $10 million for the plaintiffs’ attorney fees and give an additional $10 million to charities.
The plaintiffs had complained that Facebook had used their names and profiles in sponsored stories without their permission.
Sponsored stories are advertisements that appear on the side of the Facebook page that feature a user’s friends. But the friends never agreed to endorse or support the advertised products.
In the settlement, Facebook agreed to update its terms of service to notify users that their names and pictures can appear in advertisements. The company also agreed to create a tool to allow users to see and control which actions they take that will cause them to appear in the sponsored stories.
The company would have to obtain the consent of a parent or guardian to use the profiles of children under 18 in the ads.
But the settlement does not require Facebook to abandon the sponsored story ads.
An economist hired by the plaintiffs claimed that the sponsored stories are worth as much as $103.2 million for Facebook.
A spokesman for Facebook declined to comment on the case.
- Facebook must allow users to opt out of some ads (electronista.com)
- To Settle Suit, Facebook Alters Policies for Like Button (nytimes.com)
- Facebook Will Pay $10 Million To Make Its ‘Sponsored Stories’ Problem Go Away (forbes.com)
- Facebook will change ad service to settle lawsuit (reuters.com)
- Facebook Agrees to $10 M. Settlement, You Can Now Opt Out of Having Your Face Appear in Sponsored Ads (betabeat.com)
- Facebook to pay $10 million to settle suit over ‘likes’ (mercurynews.com)
- Facebook Settles ‘Sponsored Stories’ Lawsuit for $10 Million (pcworld.com)
- Facebook to pay S$13m to settle suit (todayonline.com)
- Facebook to pay out $10m to settle lawsuit with angry users (telegraph.co.uk)
- Facebook Paying Millions To Settle Lawsuit Over Users’ Rights (huffingtonpost.com)
McCain: Citizens United will bring ‘major scandals’
By Daniel Strauss - 03/27/12 04:21 PM ET
Sen. John McCain (R-Ariz.) predicted there would be “major scandals” as a result of the rise of super-PACs thanks to the Citizens United ruling by the Supreme Court.
“What the Supreme Court did is a combination of arrogance, naivete and stupidity the likes of which I have never seen,” McCain said Tuesday at an event hosted by Reuters.
“I promise you, there will be huge scandals because there’s too much money washing around, too much of it we don’t know who’s behind it and too much corruption associated with that kind of money,” McCain continued. “There will be major scandals.”
McCain coauthored with then-Sen. Russ Feingold (D-Wis.), legislation that limited the amount of money individuals could give to political organizations. The Citizens United case overturned part of that legislation. In the ruling, the Supreme Court said Congress shouldn’t be allowed to limit the amount corporations, unions and similar entities gave to campaigns.
Since the ruling and the rise of super-PACs during the 2012 election cycle, McCain has been an outspoken critic of excessive campaign donations.
In late February, Feingold said that super-PACs were making the Supreme Court increasingly “squeamish” and that sooner or later the Citizens United ruling would be reversed in some way.
- John McCain Warns Of Scandal From Secret Money He Enabled (thinkprogress.org)
- McCain Calls SCOTUS Decision on Campaign Spending ‘Stupid’ (usnews.com)
- McCain Rips Super PACs (thedailybeast.com)
- McCain Slams Citizens United (huffingtonpost.com)
- John McCain Calls 2012 Campaign The ‘Nastiest I Have Ever Seen’ (mediaite.com)
- 2012 GOP race is ‘nastiest’ campaign yet, McCain says (politicalticker.blogs.cnn.com)
- Romney Supporter McCain Dodges On Whether Russia Is U.S.’s ‘No. 1 Foe’: In ‘Many Respects’ They Are (thinkprogress.org)
- McCain Blasts GOP Super PACs, Calls Supreme Court Ignorant For Citizens United Decision (mediaite.com)
- John McCain Blasts Citizens United Again (huffingtonpost.com)