Congress has nearly reached bipartisan agreement on a tax bill that would retroactively renew tax breaks that expired at the end of last year, making them permanent. But President Obama has said that he will veto the bill if it reaches his desk because it heavily favors business while ignoring middle and lower-income families.
“The president would veto the proposed deal because it would give permanent tax breaks to help well-connected corporations while neglecting working families,” said White House Spokeswoman Jennifer Friedman.
The deal negotiated by aides to Senator Harry Reid (D-NV) and House Republicans would lock in tax breaks that have been renewed on a short-term basis year after year, making them permanent. Supporters of the bill say that this would give businesses more certainty in making investments, but Democrats say that they negotiated the best bill they could before the Republican takeover in January.
Not everyone agrees that this bill would benefit the country.
“It’s somewhat ironic they’re willing to just proceed here, unpaid for, leave the middle class behind and include a lot of things that I think wouldn’t benefit our economy,” said Jason Furman, chairman of the White House Council of Economic Advisers.
The president and Denis R. McDonough, the White House chief of staff, responded to the news that an agreement was reached by personally calling Democratic lawmakers to elicit support to sustain a veto as did Shaun Donovan, the White House budget director, and Treasury Secretary Jacob J. Lew.
Nancy Pelosi (D-CA) also made a round of calls to make sure that she had the votes in the House to sustain a veto.
Senator Sherrod Brown (D-OH) said that the Senate would sustain a veto as well no matter how many tax breaks the bill includes for his constituents.
“The light of day has changed the way this agreement might look,” Brown said.
The bill would make permanent provisions that the president has supported in the past, such as an expanded research and development tax credit, the deduction for state and local sales taxes and the American Opportunity Tax Credit for college costs.
It would also phase out the tax credit for wind power, ending it completely by the end of 2017 — a credit that the president supports but which conservatives object to as being unfair competition for alternative energy over the fossil fuel industry.
Republicans say that they have included their version of provisions which the president had supported but that he now won’t take yes for an answer.
“An extender package that makes permanent expiring business provisions without addressing tax credits for working families is the wrong approach, at the expense of middle-class families,” Lew said. “Any deal on tax extenders must ensure that the economic benefits are broadly shared.”
The bill gives two-thirds of the value of the tax breaks to business while eliminating the expanded earned-income credit and a child tax credit for the working poor. Those measures were targeted by Republicans angry over the president’s executive order allowing undocumented immigrants to temporarily get work permits, which they say will add to the numbers of those entitled to those tax benefits.
h/t: Huffington Post