Senate's "fiscal cliff" bill packed with sweeteners

WASHINGTON Tue Jan 1, 2013 4:37pm EST

WASHINGTON (Reuters) - The Senate packed an eclectic mix of handouts and takebacks into its last-minute deal to avoid the "fiscal cliff," including a measure to repeal part of President Barack Obama's signature healthcare overhaul and a string of special interest tax breaks.

At the center of the 157-page bill adopted early Tuesday are provisions to raise taxes on the wealthiest households and to make permanent Bush-era tax cuts for the middle class. The bill now goes to the Republican-controlled House of Representatives.

But senators also extended higher rum excise taxes to Puerto Rico and the U.S. Virgin Islands and provided tax breaks to a wide range of other groups and interests, including motorsports entertainment complexes and mine rescue teams.

Among the other sweeteners:

* special expensing rules for certain film and TV productions

* tax-exempt financing for New York Liberty Zone, an area around the site of the World Trade Center.

* extension of American Samoa economic development credit

Congressional lawmakers often insert pet projects and other unrelated provisions into major "must do" bills in the last days of a legislative session, when it is more likely that quick passage will occur.

Green energy was another big winner in the bill. Roughly a dozen provisions would extend credits and incentives for plug-in electric vehicles, energy-efficient appliances, biodiesel and renewable diesel, and other alternative energy initiatives.

The legislation also would kill the part of Obama's 2010 Affordable Care Act designed to let millions of elderly and disabled people get help at home rather than be placed in institutional care, which tends to be more expensive.

Democrats acknowledge that the insurance initiative known as the Community Living Assistance Services and Support program, or CLASS, is financially flawed but they had argued it should be fixed rather than ended.

The House voted to repeal that provision 11 months ago.

Also tucked in the bill, known as the American Taxpayer Relief Act of 2012, are measures to avert the so-called "dairy cliff" - a steep increase in milk prices that would otherwise take place this year.

The measures would extend farm subsidy programs and prevent dairy subsidies from reverting to 1949 levels, which would have meant retail milk prices could have doubled to about $7 per gallon.

One thing lawmakers did not slide into the legislation: a raise for themselves. The Senate bill says members of Congress will get no cost-of-living adjustment in their pay for fiscal year 2013.

(Reporting by Jim Wolf; Editing by Karey Wutkowski and Paul Simao)

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Comments (7)
Samrch wrote:
Lots of credits for pet projects. How about lower tax rates for firms that expand their pay roll that expand their payroll of citizens at wages that are near or above the national average or expand exports of American made products (export subsidies let China and Europe cry)paid for by a high rate for firms that do neither.

Why not tax capitol loses not gains. Investment in duds or fraud did help the economy. Investment in firms that grow and make money does.

Jan 01, 2013 4:55pm EST  --  Report as abuse
Bob9999 wrote:
So, in other words, they could have passed a bill that dealt only with the tax issues, but instead they had to lard it with perks. American disgrace.

Jan 01, 2013 6:47pm EST  --  Report as abuse
auger wrote:
Forcing Americans to shuffle elderly relatives into end-of-life institutions is a giant step backward, financially as well as family. We are beginning to readjust to extended family situations forced on us by the housing bust – these used to be the norm in the US. What is more natural than aging with the offspring, and additional generations, that you once nurtured yourself? The cost savings is well proven. Whose incomes are the senators protecting? Shortened lifespan is a well documented feature of nursing home living, as the ‘caregivers’ are well aware that no one really does care. Shameful

Jan 01, 2013 7:15pm EST  --  Report as abuse
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