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The unemployment compensation bill deception. 80% of funds will be used for corporate tax rebates!

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Better Believe It Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-10-09 11:56 AM
Original message
The unemployment compensation bill deception. 80% of funds will be used for corporate tax rebates!


Employment Bill Called Corporate Giveaway
Bill Allocates Five Times More for Corporate Tax Perks Than Unemployment Insurance Benefits
By Mike Lillis
November 9, 2009

Last week, as House Democrats took to the floor with near-unanimous praise for legislation to help the unemployed and stimulate the fragile economy, Rep. Lloyd Doggett (D-Texas) offered a wildly different message. This bill, he said, represents a textbook example of how not to deal with the economic challenges that our country faces.

The Texas Democrat wasnt talking about the extension of unemployment benefits at the heart of the bill, but an amendment providing the nations businesses even the largest corporations with tens-of-billions of dollars in tax rebates to stem recent losses. That provision, Doggett claimed, is less an economic stimulant than it is a corporate giveaway at the expense of taxpayers. It didnt help the congressmans mood that the Democrats bill allocates more than four times the funding to the business tax than it does to extending unemployment insurance.

Indeed, although the jobless benefits are the centerpiece of the Democrats bill, they represent a mere $2.4 billion of the spending, according to the Congressional Budget Office or just 10 percent of the $24 billion proposal. Nearly half of the money $10.4 billion will go toward the so-called loss carry-back extension, which will allow businesses, both large and small, to apply any losses suffered in 2008 and 2009 to income made in the previous five years, three years longer than current law allows. The result will be tax refunds topping $33 billion next year, according to the Joint Committee on Taxation.

Supporters of the two tax breaks including Senate Majority Leader Harry Reid (D-Nev.) and Senate Finance Committee Chairman Max Baucus (D-Mont.), the bill sponsors argue that theyll help prop up businesses in the midst of the worst unemployment crisis in 26 years.

Yet an analysis of a similar bill by Mark Zandi, chief economist at Moodys Economy.com, indicates that, in terms of bang-for-the-buck, the lopsided allocations in the stimulus bill are dubious. Indeed, for every dollar spent on the business tax rebate, just 21 cents are returned to the larger economy, according to Zandi. By contrast, the homebuyer tax credit returns 90 cents on the dollar, he found, while the unemployment extension returns $1.61.

This bill, Doggett said, now directs the Treasury to essentially write a check directly to corporations for more than $10 billion checks to corporations that have committed fraud, checks to corporations that have no ability to create jobs because they have no employees and exist solely on paper as a fiction. It rewards some of the very corporate losers who have brought us to the brink of economic ruin.

Please read the complete article at:

http://washingtonindependent.com/67005/texas-dem-calls-...



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tblue Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-10-09 12:03 PM
Response to Original message
1. Burn in hell, Harry Reid! Dies he have a primary opponent? Can we recruit one?
Baucus can go to hell, too, but we decided that long ago. Wasn't Obama eyeing him for Veep or am I mixing up my Blue Dogs?
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jbnow Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-10-09 01:15 PM
Response to Reply #1
2. It was Bayh Obama was considering. Wonder if tax cut
needed to be there for republicans to quit filibustering this bill as they did for 4 weeks.

This doesn't strike me as hellish as it could be. It is only to carry losses back further and businesses have been hit hard too. If companies are running a profit this doesn't help them out. We need them to get stronger for the economy to be stronger.
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uponit7771 Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-10-09 01:16 PM
Response to Original message
3. If this is true it's disgusting and furthers my criticism of the Obama admin, if it's true
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Junkdrawer Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-10-09 01:26 PM
Response to Original message
4. Its too insanely easy to loot this country
Edited on Tue Nov-10-09 01:26 PM by Junkdrawer
Theres an infamous psych experiment from the 50s. The pleasure centers of rats were wired to a button on the rats cage. The rat presses the button and the pleasure center is stimulated.

The rats died of thirst with water and food in the cage. Drinking water took time away from pressing the button.
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SpartanDem Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-10-09 01:34 PM
Response to Original message
5. The home buyer credit is corporate tax rebate?
Edited on Tue Nov-10-09 01:35 PM by SpartanDem
I wouldn't lump it in with the carry back provision
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Better Believe It Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-10-09 02:04 PM
Response to Reply #5
6. Where did you read that? Please read the article again.

Most of the funds are going to corporate tax rebates in the coming year. The rest of the funds are going for unemployment compensation and the home buyer credit with the home buyer credit funds being spent over the next decade.

10.4 Billion will be spent within a year for corporate tax rebates.

2.4 Billion will be spent over the next several months for unemployment compensation extensions.

1.8 Billion will be spent a year for the home buyer credit which over ten years will total about 10.8 billion.

"Yet another amendment, to extend a popular $8,000 tax credit for new homebuyers, will cost $10.8 billion over a decade, JCT estimated."


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SpartanDem Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-10-09 02:23 PM
Response to Reply #6
7. You said 80%
Edited on Tue Nov-10-09 02:25 PM by SpartanDem
because of the $24B package 10 was for the carry back that is just over 40% of the total. And that 10 billion for the carry back is over 10 years, like the other estimates as the article provided links to the report.

http://finance.senate.gov/sitepages/leg/LEG%202009/1030...
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Better Believe It Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-10-09 03:21 PM
Response to Reply #7
8. You linked page shows 0% will be spent for unemployment benefits??!!!
Edited on Tue Nov-10-09 03:26 PM by Better Believe It
Well, the page you linked to indicates the following amounts will be spent in 2010 under this bill:

9,960 million for homebuyer credit.

33,197 million for corporate carry back.

No figures are given on how much will be spent for extended unemployment benefits?!

Well, that chart wasn't at all helpful. However, it's pretty obvious that unemployment benefits represent a small percentage of the total bill.

So your point is ....?


29-Oct-09 5:22PM #09-2 118 R4
VERY PRELIMINARY
29-Oct-09
Provision Effective 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010-14 2010-19
1. Extend and modify first-time homebuyer credit
(sunset 4/30/10)......................................................... <1> -9,960 -2,755 678 668 473 30 24 11 4 3 -10,895 -10,823
2. Increase carryback period to 5 years for NOLs
arising in either 2008 or 2009.................................... <2> -33,197 5,870 5,202 3,808 2,673 1,877 1,319 928 653 461 -15,645 -10,407
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SpartanDem Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-10-09 04:13 PM
Response to Reply #8
10.  I was just wondering how did get you 80%
Edited on Tue Nov-10-09 04:14 PM by SpartanDem
when the carryback is 40% and if you're lumping them together.
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Better Believe It Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-10-09 05:09 PM
Response to Reply #10
11. Your math is right. Only 10% of the funds are going to unemployment benefits and the rest is ....
divided between corporate tax refunds, most of which is paid out pretty quick, and a ten year plan to provide some assistance to first time home buyers.

How many of us were led to believe this was primarily a bill to provide assistance to the unemployed and a little tax relief for home buyers? I think most of us. Until I read this article I was unaware of the fact the billions of dollars in tax rebates to corporations. That was a total surprise to me. And it really makes me angry because that corporate handout was not necessary to get the unemployment/home buyer assistance bill passed by Congress.

Would the Republicans have voted against such assistance in the Senate or worse yet tried to block such legislation with an on the floor filibuster tying up the Senate for days or weeks? I don't think so. Not unless they are determined to lose the support of millions of independents and Republicans who need help and want to appear as obstructionists who care nothing about the plight of people who are having some hard times.

And if they want to be that stupid, let them filibuster! All filibusters end and a filibuster against help for the unemployed and home buyers would be defeated.
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SpartanDem Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-10-09 08:59 PM
Response to Reply #11
12. Actually they did filibuster
Reid had file cloture not only on bill itself, but on the montion to proceed. They were pissy about democrats not letting them offer amendments and they wanted the unemployment to come out of the stimulus money.
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Better Believe It Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-10-09 09:13 PM
Response to Reply #12
13. Who participated in the "filibuster", how long did it last, when did it happen?

And hard facts and links you can provide on the "filibuster" against the unemployment benefit extension and home buyer credit would be greatly appreciated.

Thank you.
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SpartanDem Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-10-09 10:19 PM
Response to Reply #13
17. It took about two weeks to pass due to the procedural bs
you can see this play out the on the Senate caldender. This was typical the forcing of filing cloture only to vote yes anyway.

Oct 21 Senator Reid filed cloture on the motion to proceed to H.R.3548, Unemployment Compensation Extension Act of 2009.

Oct 27

Motion to Invoke Cloture on the Motion to Proceed to H.R.3548, Unemployment Benefits Extension Act of 2009;
Invoked: 87-13

http://democrats.senate.gov/calendar/2009-10.html


GOP says denied amendments halted vote on unemployment benefits bill
http://thehill.com/blogs/blog-briefing-room/news/65927-...

Expansion of Unemployment Insurance Stalled by ACORN, Immigration Amendments
http://washingtonindependent.com/64513/expanded-unemplo...

DiggsDurbin: GOP's Obstruction Of Unemployment Benefits Extension "Fundamentally Unfair"

http://videocafe.crooksandliars.com/heather/durbin-gops...
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Better Believe It Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-10-09 10:46 PM
Response to Reply #17
18. The Democratic leadership permitted the Republicans to engage in that procedural bull shit.

Instead of forcing the Republicans to stay on the single issue of extending unemployment compensation via a filibuster until 60 votes for cloture were achieved, the Senate took up and VOTED on dozens of other totally unrelated matters until the Republicans got their multi-billion dollar corporate tax rebates!

The Democrats untimately decide all procedural rules. They are in charge. They could have forced a quick vote on the unemployment benefits extension but they choose to let the Republicans diddle around for several weeks.

The Republicans delayed the extension without been forced to engage in a real filibuster!

Instead, the Republicans made the Democrats look weak and foolish.

That's the bottom line.

But, we need bi-partisanship! Can't be too partisan now, the Republicans won't like that and will get angry!

How many Democrats are needed in the Senate before that act like they are in charge, one hundred?

I'm not so sure that's enough!

And they wonder why a growing number of people think of them as being pushovers and whimpy.
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golddigger Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-10-09 03:51 PM
Response to Original message
9. And these are the same guys who are going to give you...
A Senate "Health care Bill. What a f**kin disaster that's going to be.
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Hamlette Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-10-09 09:29 PM
Response to Original message
14. business are having a horrible time right now too. They pay the first 6 months of UI benefits.
we're seeing small business go under at an alarming rate. Which of course results in more unemployment.

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ipaint Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-10-09 09:40 PM
Response to Reply #14
15. I thought businesses paid a % into a state/federal ins. fund
and that is what gets tapped to pay a claim. Not the employer.
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Hamlette Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-11-09 11:16 AM
Response to Reply #15
20. the employer gets "charged" for the benefits paid
which often works out that the employer pays dollar for dollar what is paid out in claims. There is an experience rating based on the number of claims by that employer and there is a ceiling of about 9 point something percent of the employer's payroll which is the max paid for STATE unemployment taxes. Federal unemployment taxes are paid separately and are used to cover all administrative costs of running the program and are used to pay states that have gone bust during this recession. (Benefits are paid out and the employers pay it back over the course of the next four years in quarterly taxes so the up front costs come out of the state's trust fund. A majority of the states have had to borrow from the feds to cover this recession.)
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ipaint Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-10-09 09:45 PM
Response to Reply #14
16. Who pays unemployment benefits.
Operating as a federal-state partnership, UC is based on federal law, but administered by the states. The UC program is unique among U.S. social insurance programs in that it is funded almost totally by either federal or state taxes paid by employers.

Currently, employers pay federal unemployment taxes of 6.2 percent on the first $7,000 earned by each of their employees during a calendar year. These federal taxes are used to cover the costs of administering the UC programs in all states. In addition, the federal UC taxes pay one-half of the cost of extended unemployment benefits (during periods of high unemployment) and provide for a fund from which states may borrow, if necessary, to pay benefits.

State UC tax rates vary from state-to-state. State UC taxes may be used only to pay benefits to unemployed workers. The state UC tax rate paid by employers is based on the state's current unemployment rate. As their unemployment rates go up, the states are required by federal law to raise the UC tax rate paid by employers.

http://usgovinfo.about.com/od/federalbenefitprograms/a/...
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Hamlette Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-11-09 11:11 AM
Response to Reply #16
19. In addition to the 6.2% paid in federal unemployment tax, employers pay a state unemployment tax
it's a somewhat complicated formula (in my state) and varies from state to state, but the bottom line is employers pay the first 26 weeks of unemployment benefits for their former employees. It is collected from the employer over the course of 4 years after the UI claim. We are now up to over 1 year of benefits, some of the extensions are paid by additional monies allocated by Congress over the last year or so. Congress has allocated some money for extended benefits as well. (My state hasn't hit the percentage necessary for extended benefits yet but is paying, with the latest extension (second tier temporary benefits), as many as 59 weeks of benefits.)

There is also an experience rating so the more people an employer lays off, the higher his rate will go.

(I work in my state's unemployment office, can you tell? We are seeing sad stuff on all sides with small business being hit extremely hard right now. A person may put all of his or her savings into the company in an effort to stay afloat, and often borrow money for the same purpose. When the company goes out of business, the owner (corporate officer) is often not eligible for unemployment himself or herself. These people are often honest, hardworking, and have tried to do right by their employees. I don't have any trouble helping them. When this recession ends, their unemployment tax rate will stay high for up to four years making their recovery even harder.)
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undeterred Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-11-09 11:28 AM
Response to Reply #19
21. Sometimes the corporate owner is a total asshole
who does everything he can to screw former employees out of collecting unemployment insurance. No pity for them as a group will ever come from me.
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Hamlette Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-11-09 11:33 AM
Response to Reply #21
22. too bad
you've not seen the one's I've seen or been an employer yourself.

And while I'm not asking/expecting pity, what happens when all employers "go away"? How do big corporations come into existence? Think Starbucks. Started small, kookie, hippie, great product. Now it's the evil empire because it has grown so big.

Do you have an alternative way of ownership for the "means of production"?
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RepublicanElephant Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-11-09 12:21 PM
Response to Reply #22
23. thom hartmann would have an interesting answer for that...
Edited on Wed Nov-11-09 12:21 PM by RepublicanElephant
"Why do you want big corporations to run America and ultimately your life?

As predatory monopoly capitalism run amok in the post-Reagan deregulated era, as corporations are getting bigger and bigger and increasingly holding average Americans hostage in ways ranging from credit card rates to gotcha mortgages to health insurance companies that dump tens of thousands of people a day simply because they get sick, who can stand up to such massively concentrated power? The Founders of this nation, facing such overwhelming corporate power when the British East India Company monopolized the trade in tea, sought to overthrow that corporate power with the Boston Tea Party. Now, in an odd about-face, the ninth richest man in the world and some of Americas largest and dirtiest industries are funding a tea party movement that has turned into a party to further weaken the nation our Founders started in its ability to control corporate excesses."
http://www.thomhartmann.com/2009/11/08/wednesday-novemb...
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Hamlette Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-11-09 03:30 PM
Response to Reply #23
24. "interesting" but not an answer

You have a choice. You can work for someone else or you can go start your own business and become the evil corporate boss.

I don't disagree with what Hartman is saying, I just have never heard anyone say what the alternative is. Communism doesn't work because if there is no profit motive I'm not going to take the risk. Do you just hate big business (as Harman does)? Fine, but that is not what I was defending in my op on this issue. I too think that big corporations have too much power but its the nature of the beast. We saw it this year with the car companies. The were too big to fail because if we let them fail, we put thousands of people out of jobs. It wasn't the fat cat CEO's who would suffer if you dismantle the big corporations, its the employees, the ones I assume you are out to protect.

Come up with a frigging solution, an alternative, and I'd be happy to listen. Until then, your complains only sway those who are too ill informed or lazy to recognize the implications of your .... what? Solution? Tea parties for the left?
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