The Republican “deficit hawks” in the House of Representatives are at it again, proving that their concern over the federal budget extends only to things like taking food and shelter away from the poor. Today the House passed a bill that will make permanent a temporary tax cut that largely benefits big business. The measure will add $287 billion to the deficit over the next 10 years.
The largest part of the cut, totaling around $263 billion, will make permanent a provision known as “bonus depreciation,” that allows businesses to write off things like large equipment purchases more quickly. This is a great benefit to multi-nationals, but helps the mom and pop store on the corner very little, if at all. The tax break was originally part of an economic stimulus plan that was enacted during the George W. Bush administration.
Democrats are calling out Republican hypocrisy on the measure. First, some are pointing out that the measure was not all that effective as a stimulus to begin with, and they point to a Congressional Research Service report that confirms their claim. Congressman Lloyd Doggett (D-TX), a member of the House Ways and Means Committee, said,
Even as a stimulus, the analysis shows that for every dollar that is invested we get 20 cents of growth. A fellow could go bankrupt with that kind of economics, and that’s exactly what they would have the country doing and not meeting its other needs while funding something that doesn’t work.
Another Democrat, Ron Kind of Wisconsin, pointed out that, unlike bills for social program and infrastructure spending, Republicans offer no way to pay for this cut.
Yesterday, the Ways and Means Committee was working on a markup of legislation for another short-term extension of the highway trust fund — you know, the transportation infrastructure investment we desperately need in this country.We were scratching and clawing to try to find an additional $10 billion over the next 10 months to try to keep some of these projects moving forward, and yet here today, we have another permanent change to the tax code at a cost of $287 billion over the next 10 years and not a nickel of it paid for.
Congressman Sander Levin (D-MI) highlighted the main reason that many are crying foul over this legislation: the practice of bonus depreciation was eliminated in the tax reform proposal that was circulated by Republicans earlier this year. Levin observed on the House floor:
You, six months ago, helped produce a package that eliminated this provision, and now you come here and you say you want it permanent. This is acrobatics. This is congressional acrobatics. You are just spinning in an opposite direction, and you’re making this place a circus.
The bill is not likely to pass the Senate, and if it should ever get to the president’s desk it faces a certain veto.
Here is the video of Congressman Levin’s remarks: