In preparation for introduction of an actual bill later this week, Democratic leaders in Congress are beginning to tinker with the proposals of the Obama transition team for economic stimulus legislation. It looks like some of the business tax breaks inserted by Obama's team in efforts to garner Republican support will be removed from the initial draft bill in order to keep the total cost in the range of $850 billion, while making room for some Senators and Congressmen to insert additional spending appropriations. This will put the onus on Republicans who will have to accept a package at or near the trillion dollar level if they want to restore their beloved business tax relief provisions.
For example, first to be eliminated is likely to be the proposed $3,000 business tax credit for each new hire, which could cost $50 billion. Next to be cut would probably be extension of operating loss carry backs for five years. These two changes would make room for a one year patch of the alternative minimum tax, which costs about $70 billion.
Democrats in both houses favor adding an alternative energy tax credit costing $25 billion to the legislation, as well as energy infrastructure spending of up to $60 billion. Rural development initiatives are being pushed by House Majority Whip Clyburn and House Appropriations Chairman Obey. Senator Durbin is looking to insert mortgage cram down revisions to the bankruptcy laws in the bill.
Other initiatives under discussion include money to assist with insulation of homes owned by lower income families, and tax incentives for small businesses in economically distressed communities. Accelerated depreciation or expensing of small business equipment purchases are also in the mix.
NASA is looking for a budget increase of $2.9 billion, including $1 billion to accelerate development of the Constellation, the replacement for the aging fleet of space shuttles.
Senate Budget Committee Chairman Kent Conrad and Ranking Member Judd Gregg are emphasizing increased appropriations for road building, electric grid construction, and medical record computerization. Their committee will also be taking up the cabinet nomination of former Congressional Budget Office head Peter Orszag as the head the Office of Management and Budget.
In a big bow in the direction of long term deficit control, Conrad, Gregg and Senate Finance Chairman Max Baucus are pushing for creation of a commission or panel to study health care and social security entitlement cost control.
Finally, Federal Reserve Chairman Ben Bernanke said in a speech January 13 at the London School of Economics that he expects the new administration's economic stimulus package to produce a "significant boost" to economic activity.
For example, first to be eliminated is likely to be the proposed $3,000 business tax credit for each new hire, which could cost $50 billion. Next to be cut would probably be extension of operating loss carry backs for five years. These two changes would make room for a one year patch of the alternative minimum tax, which costs about $70 billion.
Democrats in both houses favor adding an alternative energy tax credit costing $25 billion to the legislation, as well as energy infrastructure spending of up to $60 billion. Rural development initiatives are being pushed by House Majority Whip Clyburn and House Appropriations Chairman Obey. Senator Durbin is looking to insert mortgage cram down revisions to the bankruptcy laws in the bill.
Other initiatives under discussion include money to assist with insulation of homes owned by lower income families, and tax incentives for small businesses in economically distressed communities. Accelerated depreciation or expensing of small business equipment purchases are also in the mix.
NASA is looking for a budget increase of $2.9 billion, including $1 billion to accelerate development of the Constellation, the replacement for the aging fleet of space shuttles.
Senate Budget Committee Chairman Kent Conrad and Ranking Member Judd Gregg are emphasizing increased appropriations for road building, electric grid construction, and medical record computerization. Their committee will also be taking up the cabinet nomination of former Congressional Budget Office head Peter Orszag as the head the Office of Management and Budget.
In a big bow in the direction of long term deficit control, Conrad, Gregg and Senate Finance Chairman Max Baucus are pushing for creation of a commission or panel to study health care and social security entitlement cost control.
Finally, Federal Reserve Chairman Ben Bernanke said in a speech January 13 at the London School of Economics that he expects the new administration's economic stimulus package to produce a "significant boost" to economic activity.
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