Well it looks like all the work to get the stimulus bill down to $789 billion has pretty much doomed it to failure. Almost all of the pro-business stuff was chopped out of it or just watered down basically so it will stimulate hardly anything. I assure you that people will doing postmortem on why the stimulus failed in just a few months time. Here are some highlights on what they cut out of the stimulus.
A proposed $15,000 tax credit for homebuyers was reduced to $8,000, Democratic Senator Max Baucus said, a decrease that may hurt U.S. homebuilders such as Centex and D.R. Horton Inc.
Yup they watered down the thing that could have *directly* helped the housing industry. I wonder if anyone on Congress know that falling house prices are what is causing most of this mess. $15k for buying a house is a big incentive and represents nearly half a years salary for most Americans. Plus it gets people to remove supply from the system so that prices can come back to equilibrium again.
A family could have conceivably put 3 years worth of retirement money away or payed for 2 years of college simply by buying their first home. $8k is still good but the psychological impact of getting what could have been a 10% discount on a $150K home is huge.
In a loss for big homebuilders and manufacturers, negotiators all but eliminated the biggest tax cut for businesses, a provision that would let companies convert losses into tax refunds, Baucus said.
Baucus said the measure, which would have let companies claim an estimated $67.5 billion in tax refunds this year and next, was sacrificed to help keep the final package under $800 billion.
This change might single handedly doomed this thing to failure. $67 billion in tax refunds in the next 2 years could have easily kept some companies from laying off more workers. It was a perfect way for companies to turn the losses they are suffering right now into capital down the road. The recession could have actually been a somewhat positive thing for companies that are suffering big losses now. This could have softened the blow for many companies.
Democratic Senator Barbara Mikulski of Maryland said her plan to aid the auto industry by letting car buyers take a tax write-off on their interest payments was reduced to $2 billion from the original $11 billion.
Didn't we just invest billions in these companies so that they wouldn't go bankrupt? So they water down the very amendment that could have helped the auto industry by giving a financial incentive for consumers to buy a car. Instead they gutted it and took away the ability to deduct the interest if you had your car financed. More case-in-point for why Congress is so reviled in this country.
Lawmakers scaled back Obama’s proposed payroll tax credit to $400 for individuals and $800 for families rather than the original proposal of $500 and $1,000, Baucus said. The plan includes an alternative minimum tax cut, he said.
They even gutted Obama's campaign promise? The GOP plan to cut payroll taxes would have been the best solution to help the middle class but $500 is $500. What is wrong with giving people an extra $100? That is like a week of groceries or like 4 tanks of gas that the government is taking away.
However the AMT tax cut is a so called "tax cut for the rich" that all the Dems supposedly hate since only upper middle class people get hit by it. Whatever the case this thing is a flawed joke that will stimulate hardly anything. I will be shocked if 4 million jobs will be saved or created due to this weak-kneed bill.
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