Families, students to benefit from $1.8T congressional deal
Published at | Updated at
Families and colleges students are due to keep stimulus-era tax breaks as a result of a deal Congress is expected to pass to avert a government shutdown.
While Republican presidential hopefuls were debating in Las Vegas Tuesday night, House speaker Paul Ryan, R-Wisconsin, announced an agreement that guarantees $560 billion in tax breaks over the next 10 years, according to The Hill.
The deal codifies the 2009 expansions of the child tax credit and the earned income tax credit, as well as the tax credit for full-time college students.
Deficit hawks have little to celebrate with the deal; the agreement also guarantees $1.1 trillion in discretionary spending, making the deal budget negative to the tune of $1.8 trillion. Vox analyst Ezra Klein said Ryan’s lead of the bill is an ironic twist for the congressman who has been so outspoken on the national debt during his tenure.
“This deal, as a whole, basically betrays everything the two parties have been saying about fiscal policy for the last seven years,” Klein said.
According to the Christian Science Monitor, many staunch conservatives have been silent on the deal because they want Ryan to succeed as speaker, and anti-spending pressures will increase when the new leadership has a full year to make compromises.
House Minority Leader Nancy Pelosi, D-California, joked that deficit hawks “should be on the endangered species list.”
As Politico writer Rachel Bade quipped, "There’s something from everybody’s wish list: breaks for energy-efficient homes and commercial buildings; deductions for business office furniture, computers and machines; tax savings for the film and TV industries and rum producers in the Caribbean; and even tax perks for owning a racehorse or two-wheeled plug-in electric car."
The Center for a Responsible Federal Budget criticized the deal, saying it undoes all the good of the $800 billion in savings from the 2013 fiscal cliff deal, and the subsequent sequester, which led to $900 billion in spending cuts.
Both houses of Congress approved the measure Friday. The most controversial part of the bill for the White House is a two-year delay of the “Cadillac tax,” which taxes employers that offer overpriced health care plans. That tax was created as a major funding provision for Obamacare.
“It’s bad enough that this budget-busting tax deal would add to the debt, but lawmakers have decided to make things worse by undermining the cost-control measures in the Affordable Care Act,” said CRFB president Maya MacGuineas. “Unfortunately, a two-year delay of the Cadillac Tax makes full repeal more likely in the future.”