House Pushes Forward On Estate-Tax Break, Pushes Back Jobs Bill
Job creation will probably have to wait until next year but the House is determined to extend the estate tax break permanently before leaving for the holidays, Majority Leader Steny Hoyer (D-Md.) told reporters Tuesday.
House Democrats also want to see an extension on unemployment insurance signed into law by Christmas, Hoyer said during his weekly press conference, but a new bill to stimulate employment will likely remain in the planning stages until after Congress returns in January. "The important thing from my perspective, speaking for Steny Hoyer, is to get a jobs package that will work, not getting one right now," he said.
In addition to unemployment, Hoyer said infrastructure spending and aid to states are top priorities, with more discussion of public jobs and a jobs tax credit -- the latter largely dismissed as ineffective by economists -- still to come.
Before the week is out, however, the House will vote to permanently extend the lower estate tax rates established during the Bush administration, which are set to expire at the end of this year. Under the law, estate taxes were lowered from 55 percent on estates worth more than $1 million to 45 percent on those over $3.5 million. Without changes, the standing law will eliminate all estate taxes next year and then reinstate the old 55-percent tax rate the following year.
"We know that many in the business community in particular are very strongly for a permanent fix on this," Hoyer said.
An extension of an existing law -- especially a tax cut -- is naturally easier to move through Congress than a wide-ranging jobs program. And the standing estate-tax law's unusual expiration clauses were designed to require a decision at this point -- how to pay for the tax break, which Congressional reports say will cost roughly $234 billion over the next 10 years.
The tax break still isn't paid for. Instead of making that tough decision, House leadership plans to raise the ceiling on government debt. "There is no alternative to passing the debt limit extension," Hoyer said, adding that it should be high enough to cover lawmakers through the midterm elections next November.
Of course, House action is no guarantee of final passage. Across the Capitol, Sen. Max Baucus (D-Mont.) has introduced his own estate-tax extension tied to inflation, but the Senate is consumed with health care reform and unlikely to tackle the issue before the new year.
Hoyer touted the House passage of emergency tax relief and extensions of COBRA eligibility as examples of support for suffering Americans. He acknowledged, however, that GDP growth and signs of recovery on Wall Street aren't good enough for the growing millions who are out of work.
"My litmus test... will be when the economy starts creating jobs, not losing jobs," he said.