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Heller looks to merge tax cuts extenders, unemployment benefits extension bills

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The co-author and sponsor of the Senate's unemployment benefits extension bill, Senator Dean Heller, R-NV is looking at any way possible to pass the bill in the Republican controlled House of Representatives and believes he might have found a winning combination. Heller told the press on Thursday, May 8, 2014 that he is considering combining the tax cuts extenders bill and the unemployment benefits extension bill to ensure the Emergency Unemployment Compensation (EUC) program is extended for the nearly three million Americans before the end of May deadline.

Heller has taken it upon himself to be the official negotiator for the bill with the House GOP. He is looking to add any provision that would be acceptable to Speaker of the House John Boehner, R-OH and the rest of the House Republicans to put the bill to a House vote. President Barack Obama opposes adding any provisions to the bill as does Senate Majority Leader Harry Reid, D-NV. However, with the business tax cuts extenders bills going to be passed with bipartisan support and Obama upset neither bills has their costs offset and are adding to the deficit, while the unemployment benefits extension bill languishing in the House, combining the two ensures both passes.

Senator Heller now thinks that there is an opportunity to attach the unemployment benefits extension to the Senate business tax cuts extender bill. The two-year extension bill will renew "over 50 wide ranging tax cuts," will cost $85 billion, and is not offset, adding to the deficit. Heller thinks it's a win a win situation for President Obama, the Democrats and House GOP. The Senate Finance Committee passed the bill in the beginning of April, and will move to a full Senate vote next week. "Tax extenders" are bills, which as MSNBC describes as "tax breaks that were originally intended to be temporary, but which Congress has extended annually."

Senator Heller told the press on Thursday, May 8 that he is considering negotiating with the House GOP and Senate leadership about adding the unemployment benefits extension bill to the tax cuts extenders. Heller stated that "Yes. We are taking a look at favorable pieces of legislation out there that we can attach something to." Congress Quarterly's Roll Call said this combination "could represent one of the best chances for the unemployment bill to make it to the president's desk."

The House is working on their own business tax cuts extenders bills, and intends to work with the Senate to "reconcile" the two Houses different bills to ensure the cuts are passed by the end of the year when they expire. This past week the House Ways and Means Committee advanced the bill, which includes only six tax cuts extenders, including the pricey Research and Experimentation Credit. The bill over all costs $310 billion and is not offset by any revenue, adding to the deficit and will make all six tax credits permanent.

However, there is some controversy surrounding the Houses' bill, mostly because it has taken priority over the unemployment benefits extension bill. Rep. Sander Levin, D-MI, the ranking member of the Ways and Means Committee and active supporter of the unemployment benefits extension criticized the bill saying "To put forth a bill costing $310 billion, increasing the deficit by that amount and not paying attention to other needs, is fiscally irresponsible." However, the committee chairman promised that the remaining tax extenders Dave Camp, R-MI will be passed in separate bills to make it more manageable. Camp explained; "Sixty bills would be unworkable. We are starting with bills that have bipartisan cosponsors. We aren't done."

Among the six tax credits to be permanent is the Research and Experimentation Credit ("R&D credit") known as H.R. 4438 - American Research and Competitiveness Act of 2014 and sponsored by Rep. Kevin Brady, R-TX, which would cost $156 billion for 10 years. The bill also has bipartisan support with nine Democrats co-sponsoring it. The bill creates high tech jobs, and is part of a group of business tax extenders, that have continually renewed by Congress, Republicans and Democrats since 1981. The extenders bills in total consist of 60 business tax cuts. The R&D credit tax extender is becoming a major issue this time, because its cost in not being offset through additional revenue or closing or revising tax loopholes and the entire price of the bill will be added to the deficit, and it is set to be passed by the House next week.

President Obama promised to veto the R&D credit, if the House does not pass the unemployment benefits extension. The business tax credits however, usually has bipartisan support, it only this particular circumstance with the GOP not providing revenue to pay for the bill, and ignoring the extending the EUC that has made this routine tax cuts extension newsworthy. Obama and the White House issued a "Statement of Administration Policy" on the tax credit on Tuesday, May 6, 2014 indicating they are upset with the high cost being added to the deficit when the House instead could have passed the unemployment benefits extension.

The White House finds it hypocritical that the GOP always wants the cost of legislation offset, but when it comes to a bill benefitting corporations and the wealthy, that point is irrelevant. However, House Minority Whip Steny Hoyer, D-MD thinks the Republicans practice a double standard when it comes to tax cuts, all the basic principles go out the window. Hoyer commented; "This takes no courage to put on the floor or to vote for. None. Zero. Zip. Tax cuts are easy to vote for. Paying for what you buy is difficult to vote for. And all of the wringing of hands and gnashing of teeth with reference to the deficit seems to go by the boards when the Republicans talk of tax cuts."

The House thinks that the R&D credit will boost the economy far more than extending unemployment benefits. The Congressional Budget Office (CBO) study released earlier this year found a full year extension would only provide 0.2 growth to the economy, and even the five-month Senate extension would serve beneficial to the economy. If extended for a full year the CBO study concludes extending benefits would add 200,000 jobs and the program would cost $26 billion.

The Senate finally reached a bipartisan compromise on to extend the EUC program in March, and passed the bill on April 7, 2014. The retroactive five-month extension laid out in the Senate bill lasts until June 1, 2014. The Senate bill expires in the end of May, there is very little time left for the House of Representatives to pass the unemployment benefits extension. Senators Dean Heller and Jack Reed, D-RI, the bill's co-authors and sponsors have promised to go back and start the process over and write another bill. As time goes further away from the Dec. 28, 2013 expiration, and closer to the midterm elections, each delays lowers the probability of passing the bill.

At this point Speaker Boehner refuses to put the bill to a vote, because it does not include job creation measures. The cost of the $10 billion bill is entirely paid for with revenue and does not add to the deficit. The speaker has been pushing for the White House to provide him a list of acceptable provisions to be added to the bill. President Barack Obama and Senate Majority Leader Harry, Reid, D-NV do not want any provisions added to the unemployment extension bill, they prefer it passes as it is. Obama and Reid's objection has prevented Boehner from negotiating with Sen. Heller about adding any provision that would make the bill acceptable him and Republicans in the House.

Meanwhile House Republicans have expressed interest in passing the bill, but they to want to add provisions including the job creation measure that would appeal to Boehner and convince him to put the bill to a House vote. Among the provisions being considered are a business tax provision or passing the XL Keystone Pipeline along with modifying two elements of the health care law, and the job training programs restructure bill, which had the support of many Republicans.

The new April jobs report released on May 2, 2014 makes it even more complicated to convince reluctant Republicans to pass the unemployment benefits extension. The unemployment rate is now 6.3 percent, and the long-term unemployment rate also fell, with 287,000 less Americans unemployed for longer than six months. Now the total stands at 3.5 million Americans or 35.5 percent all unemployed Americans.

The unemployment benefits extension bill is left in a standstill between Republicans who want provisions and the Democrats who refuse to let any be added, part of the midterm election battle front. Meanwhile since the EUC program expired on Dec. 28, 2013 nearly 3 million Americans lost access to benefits, and each week about 70,000 Americans keep losing benefits. It is projected that by the end of the year 1.6 million more Americans will lose benefits. Heller hopes adding to the unemployment benefits extension to the tax extenders bills with give the bill the bipartisan support it needs to pass.

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Bonnie K. Goodman is the Editor of the Academic Buzz Network, a series of political, academic & education blogs which includes History Musings: History, News & Politics. She has a BA in History & Art History & a Masters in Library and Information Studies, both from McGill University, and has done graduate work in Jewish history at Concordia University as part of the MA in Judaic Studies program. Her specializations are US, Canadian & Israeli politics.

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