Quick Thought on Unemployment Benefits

All of us have our pet peeves, and one of mine is the “carried interest” loophole, which lets those who get their income from venture capital, private equity, hedge funds, and real estate limited partnerships pay their taxes at capital gains rates (20%) rather than ordinary income rates (39.6%).

With about 1.3 million people (plus the people who depend on them) losing their unemployment benefits as of today, I went back to check what carried interest costs the Treasury, to see if it would have covered extending those benefits for three months.

Carried interest costs the government between $11 and 13 billion a year*, while the unemployment benefits would have cost $6 billion.

So score one for the caviar and Champagne crowd, and nothing for the Ramen noodle and tap water crowd.

See “A Costly and Unjust Perk for Financiers,” Lynn Forester de Rothschild, NYT, February 24, 2013

Prez to Speak Soon

The President has been meeting with Harry Reid about a scaled-down approach to the fiscal cliff, and is expected to speak at 5 EST.

They are discussing a Senate bill that would extend tax cuts for families under $250,000, delay the sequester (yes, kick that rusty can even further down the road), and extend unemployment benefits.

If this passed the Senate, and every Dem in the House voted for it, they would need 26 GOP votes.

The “Bah Humbug” Congress

The House Republicans are giving over-tired toddlers who hold their breath till they turn blue a bad name.  Meanwhile, more than three million Americans don’t know if they’ll get their unemployment checks after December 31, which means they don’t know if they’ll be able to buy food and pay their heating bills.  I’m sure they’re having a wonderful Christmas and Chanukah.

Eric Cantor is saying the President should go up to the Hill to negotiate the payroll tax cut/unemployment benefits/Medicare payments extension.  That’s not his job.  He’s supposed to either sign or veto the thing.  We have 535 senators and congressmen who are supposed to do the negotiating.

Cantor is also claiming that differences between the House and Senate can be resolved “in about an hour.”  Well, great, why don’t he and his big baby colleagues stop posturing and take an hour and do that?

Meanwhile, Dave Camp, chairman of the House Ways and Means Committee, is saying that if the Senate had just made the extension for three months, instead of two, it would have been okay.  Really?  That’s what the hold-up is?  Two months or three?

For some families, this extension is critical to their daily lives.  It’s also vital to keep the overall economy from sliding back into recession.

They are looking for a way out, a way to save face.  But it’s hard to save face when you’re a horse’s ass.

Anybody Doubt the Tea Partiers in the House Want a Bad Economy?

The House GOP’s refusal to pass the extension of the payroll tax cut and unemployment insurance that the Senate passed overwhelmingly isn’t just silly, it’s hurting the economy right now, this very minute.

70% of our economy is consumer spending, this is the week before Christmas (kind of a significant week for consumer spending!), and Americans faced with an increase in their tax bill (typically about $1,000) or a cut-off in their unemployment benefits are probably going to spend less this season.

With the surprise and disappointment of the weekend, they might be returning stuff today, rather than buying more.

Those conservatives in the House sure are revolting, in more ways than one.