The Political Bridge

Congressman John Yarmuth (D-KY) Introduces Major New Legislation to Move TARP Funds From Wall Street to Main Street

Congressman John Yarmuth

Representing Kentucky’s 3^rd Congressional District

PRESS RELEASE  

   
FOR IMMEDIATE RELEASE

December 14, 2009   

MEDIA CONTACT

Trey Pollard 202.225.5401   

The “Give Main Street Credit Act” Will Provide $20 Billion in Low-Interest, Direct Loans to American Small Businesses

(Washington, DC) Today, Congressman John Yarmuth (KY-3) announced the introduction of the Give Credit to Main Street Act – new legislation that would require $20 billion in low-interest loans be made available to small businesses throughout the nation. Using money previously set aside for Wall Street financial institutions and big banks via the Troubled Asset Relief Program (TARP), the bill redirects funds to the Small Business Administration (SBA) to provide direct lending to small companies.

“Small businesses drive economic growth and employ 50 percent of our nation’s workforce. But, even with the assistance of the Troubled Asset Relief Program, big Wall Street banks are not lending,” said Congressman Yarmuth. “We need to put Main Street ahead of Wall Street – and the bill I have introduced will give small businesses loans at the same low rate the big banks enjoy, ensuring they have the resources they need to grow and create jobs.”

The introduction of Congressman Yarmuth’s legislation coincides with President Obama’s meeting today with CEOs from some of the nation’s largest banking interests, in which the President will encourage the banking industry to unfreeze lending to small businesses.

Of the 22 banks that received the most TARP funding, three provide no small business loans at all. Over the past six months, total small business lending by these 22 banks dropped by more than $10.5 billion while SBA loan guarantees are projected to drop by $10 billion this year.

The Give Credit to Main Street Act would make loans available directly to small businesses through the Small Business Administration. Loans would be made with interest accumulating at the federal funds rate, which currently stands at 0.25 percent, with interest-only payments required for the first two years.

 

A Video from Congress.org: How Does Cap and Trade Work? A Video from

Final Tally of the House Vote on H.R. 4213: Tax Extenders Act of 2009

    (Democrats in roman; Republicans in italic; Independents underlined)
  H R 4213   RECORDED VOTE   9-Dec-2009   3:17 PM
  QUESTION:  On Passage
  BILL TITLE: Tax Extenders Act of 2009

	Ayes	Noes	PRES	NV
Democratic	239	10		8
Republican	2	171		4
Independent
TOTALS	241	181		12

---- AYES 241 ---

Abercrombie Ackerman Adler (NJ) Altmire Andrews Arcuri Baca Baird Barrow Becerra Berkley Berman Berry Bishop (GA) Bishop (NY) Blumenauer Boccieri Boren Boswell Boucher Boyd Brady (PA) Braley (IA) Bright Brown, Corrine Butterfield Cao Capps Capuano Cardoza Carnahan Carney Carson (IN) Castor (FL) Chandler Childers Chu Clarke Clay Cleaver Clyburn Cohen Connolly (VA) Conyers Cooper Costa Costello Courtney Crowley Cuellar Cummings Dahlkemper Davis (AL) Davis (CA) Davis (IL) Davis (TN) DeFazio DeGette Delahunt DeLauro Dicks Dingell Doggett Donnelly (IN) Doyle Driehaus Edwards (MD) Edwards (TX) Ellison Ellsworth Engel Eshoo Etheridge Farr Fattah Filner Foster Frank (MA) Garamendi Giffords Gonzalez

Gordon (TN) Grayson Green, Al Green, Gene Griffith Grijalva Gutierrez Hall (NY) Halvorson Hare Harman Hastings (FL) Heinrich Herseth Sandlin Higgins Hill Hinojosa Hirono Hodes Holden Holt Honda Hoyer Inslee Israel Jackson (IL) Jackson-Lee (TX) Johnson (GA) Johnson, E. B. Jones Kagen Kanjorski Kennedy Kildee Kilpatrick (MI) Kilroy Kind Kirkpatrick (AZ) Kissell Kosmas Kratovil Kucinich Langevin Larsen (WA) Larson (CT) Lee (CA) Levin Lipinski Loebsack Lofgren, Zoe Lowey Luján Lynch Maloney Markey (CO) Markey (MA) Marshall Massa Matheson Matsui McCarthy (NY) McCollum McDermott McGovern McIntyre McMahon McNerney Meek (FL) Meeks (NY) Melancon Michaud Miller (NC) Miller, George Minnick Mollohan Moore (KS) Moore (WI) Murphy (CT) Murphy (NY) Murphy, Patrick Nadler (NY)

Napolitano Neal (MA) Nye Oberstar Obey Olver Ortiz Owens Pallone Pascrell Pastor (AZ) Payne Perlmutter Perriello Peters Peterson Pingree (ME) Pomeroy Price (NC) Quigley Rahall Rangel Reyes Richardson Rodriguez Ross Rothman (NJ) Roybal-Allard Ruppersberger Rush Ryan (OH) Salazar Sánchez, Linda T. Sarbanes Schakowsky Schauer Schiff Schwartz Scott (GA) Scott (VA) Serrano Sestak Shea-Porter Sherman Shuler Sires Skelton Slaughter Snyder Space Speier Spratt Stark Stupak Sutton Tanner Teague Thompson (CA) Thompson (MS) Tierney Titus Tonko Towns Tsongas Van Hollen Velázquez Visclosky Walz Wasserman Schultz Waters Watson Watt Waxman Weiner Welch Wilson (OH) Woolsey Wu Yarmuth

---- NOES 181 ---

Aderholt Akin Alexander Austria Bachmann Bachus Bartlett Barton (TX) Bean Biggert Bilbray Bilirakis Bishop (UT) Blackburn Blunt Boehner Bonner Bono Mack Boozman Boustany Brady (TX) Broun (GA) Brown (SC) Brown-Waite, Ginny Buchanan Burgess Burton (IN) Buyer Calvert Camp Campbell Cantor Capito Cassidy Castle Chaffetz Coble Coffman (CO) Cole Conaway Crenshaw Culberson Davis (KY) Deal (GA) Dent Diaz-Balart, L. Diaz-Balart, M. Dreier Duncan Ehlers Emerson Fallin Flake Fleming Forbes Fortenberry Foxx Franks (AZ) Frelinghuysen Gallegly Garrett (NJ)

Gerlach Gingrey (GA) Gohmert Goodlatte Graves Guthrie Hall (TX) Harper Hastings (WA) Heller Hensarling Herger Himes Hoekstra Hunter Inglis Issa Jenkins Johnson (IL) Johnson, Sam Jordan (OH) King (IA) King (NY) Kingston Kirk Klein (FL) Kline (MN) Lamborn Lance Latham LaTourette Latta Lee (NY) Lewis (CA) Linder LoBiondo Lucas Luetkemeyer Lummis Lungren, Daniel E. Mack Maffei Manzullo Marchant McCarthy (CA) McCaul McClintock McCotter McHenry McKeon McMorris Rodgers Mica Miller (FL) Miller (MI) Miller, Gary Mitchell Moran (KS) Murphy, Tim Myrick Neugebauer Nunes

Olson Paul Paulsen Pence Petri Pitts Platts Poe (TX) Polis (CO) Posey Price (GA) Putnam Rehberg Reichert Roe (TN) Rogers (AL) Rogers (KY) Rogers (MI) Rohrabacher Rooney Ros-Lehtinen Roskam Royce Ryan (WI) Scalise Schmidt Schock Schrader Sensenbrenner Sessions Shadegg Shimkus Shuster Simpson Smith (NE) Smith (NJ) Smith (TX) Smith (WA) Souder Stearns Sullivan Taylor Terry Thompson (PA) Thornberry Tiahrt Tiberi Turner Upton Walden Wamp Westmoreland Wexler Whitfield Wilson (SC) Wittman Wolf Young (AK) Young (FL)

---- NOT VOTING 12 ---

Baldwin Barrett (SC) Carter Fudge

Granger Hinchey Kaptur Lewis (GA)

Moran (VA) Murtha Radanovich Sanchez, Loretta

In Case You Missed It: The U.S. House of Representatives has Approved the Tax Extenders Act of 2009

(These extenders mainly consisted of the tax sweeters in last year's bailout; Source: Thomas.Com)

H.R.4213
Title: To amend the Internal Revenue Code of 1986 to extend certain expiring provisions, and for other purposes.
Sponsor: Rep Rangel, Charles B. [NY-15] (introduced 12/7/2009)  Cosponsors (None)
Related Bills: H.RES.955
Latest Major Action: 12/10/2009 Referred to Senate committee. Status: Received in the Senate and Read twice and referred to the Committee on Finance.

---

SUMMARY AS OF:
12/7/2009--Introduced. (Passed in the House on December 9, 2009 by a 241-181 vote)

Tax Extenders Act of 2009 - Amends the Internal Revenue Code to extend through 2010 certain expiring provisions for individual taxpayers, including: (1) the taxpayer election to deduct state and local general sales taxes in lieu of state and local income taxes; (2) the standard tax deduction for state and local real property taxes; (3) the tax deduction from gross income for qualified tuition and related expenses; and (4) the tax deduction from gross income for certain expenses of elementary and secondary school teachers.

Extends through 2010 expiring provisions for business taxpayers, including: (1) the tax credit for increasing research activities; (2) tax treatment of certain items affecting U.S. shareholders of controlled foreign corporation; (3) accelerated depreciation for qualified leasehold, restaurant, and retail property, for motorsports entertainment complexes, and for farming business machinery and equipment; (4) the tax credit for railroad track maintenance expenditures; (5) the enhanced expensing allowance for certain film and television production costs; (6) expensing of environmental remediation costs; (7) the tax credit for mine rescue team training expenses; (8) the taxpayer election to expense advanced mine safety equipment expenditures; (9) the tax credit for differential wages payments to employees who are active duty members of the Uniformed Services; (10) tax rules relating to regulated investment companies (RICs); and (11) the suspension of the taxable income limitation on percentage depletion for oil and natural gas produced from marginal properties.

Extends through 2010 expiring provisions relating to charitable organizations and contributions, including: (1) the tax deduction for charitable contributions of capital gain real property by individual taxpayers and certain corporate farmers and ranchers for conservation purposes; (2) the enhanced tax deduction for charitable contributions of food inventory and book inventories to public schools and for corporate contributions of computer technology and equipment for educational purposes; (3) penalty-free distributions from individual retirement accounts (IRAs) for charitable purposes; and (4) special tax rules for payments to controlling exempt organizations, exclusion of gain or loss from unrelated business taxable income from the sale or exchange of certain brownfield sites, and basis adjustment to stock of S corporations making charitable contributions.

Extends through 2010: (1) the tax credit for employment of members of Indian tribes; (2) accelerated depreciation of property used for business purposes on an Indian reservation; (3) extension of the tax deduction for income attributable to domestic production activities to such activities in Puerto Rico; (4) the limitation on the amount of distilled spirits tax covered (paid over) into the treasuries of Puerto Rico and the Virgin Islands; and (5) the tax credit for American Samoa economic development expenditures.

Extends through 2010 certain provisions relating to community development and assistance, including: (1) tax incentives in empowerment zones and renewal communities; (2) the new markets tax credit; (3) tax incentives for investment in the District of Columbia, the New York Liberty Zone, the Gulf Opportunity Zone, and low-income housing.

Extends through 2010 tax-related disaster relief provisions, including: (1) the tax deduction for personal casualty losses attributable to federally-declared disasters; (2) expensing allowance for cleanup and other expenditures in disaster areas; (3) the five-year extended carryover period for net operating losses incurred in a disaster area; (4) waiver of mortgage revenue bond requirements for refinancing residences damaged or destroyed in a disaster area; and (5) expensing and accelerated depreciation of certain disaster assistance property.

Extends through 2010 energy conservation and production provisions, including: (1) the tax credits for biodiesel and renewable diesel used as fuel; (2) the alternative motor vehicle tax credit for large hybrid vehicles; (3) the alternative fuel excise tax credit for natural gas and liquefied petroleum gas; and (4) tax rules relating to sales required to implement federal and state restructuring policy for qualified electric utilities.

Revises and adds reporting and other requirements relating to income from assets held abroad, including by: (1) requiring foreign financial and nonfinancial institutions to withhold 30% of payments made to such institutions by U.S. individuals unless such institutions agree to disclose the identity of such individuals and report on their bank transactions; (2) denying a tax deduction for interest on non-registered bonds issued outside the United States; (3) requiring any individual who holds more than $50,000 in a depository or custodial account maintained by a foreign financial institution to report on such accounts; (4) imposing an enhanced tax penalty for underpayments attributable to undisclosed foreign financial assets; (5) extending the limitation period for assessment of underpayments with respect to assets held outside the United States; (6) requiring shareholders of a passive foreign investment company to file informational returns; (7) enhancing tax rules and penalties relating to foreign trusts with U.S. beneficiaries; and (8) requiring withholding of tax on dividend equivalent payments received by foreign individuals.

Sets forth tax rules relating to partnership interests transferred in connection with the performance of services.

Increases by an additional 26.5% the required estimated tax payments for certain large corporations in the third quarter of 2014.

Requires the Chief of Staff of the Joint Committee on Taxation to submit to the House Ways and Means Committee and the Senate Finance Committee a report on each tax expenditure extended by this Act.

 

Report Shows that Raising Taxes in a Recession Does Not Harm a State's Economic Performance

To read more of this report from the Center for Budget and Policy Priorities Download CBPP

TABLE 1: ANNUAL ECONOMIC GROWTH BY VARIOUS INDICATORS, 2004-2007.
	Average Annual Growth Rates
Indicator	States that Increased Taxes Significantly	National Average
Total Personal Income	6.1%	6.2%
Employment	1.6%	1.7%
Median Wage	3.1%	3.1%
Source: Bureau of Labor Statistics, Bureau of Economic Analysis, and CBPP calculations of data from the NCSL and state revenue departments. Note: States were grouped according the amount of gross tax increases between late 2001 and 2004. States that increased taxes significantly are those that enacted cumulative increases of at least 1 percent of the previous year's tax revenues.

 As Table 1 shows, states that had enacted significant tax increases (more than 1 percent of revenues) in the 2002-04 period saw growth rates in personal income, employment, and the median wage from 2004 to 2007 that closely matched national averages. Furthermore, a number of states that enacted significant tax increases during the early 2000s subsequently experienced above-average growth in these key economic indicators.

 ■North Carolina, for example, raised taxes by about 3.5 percent of revenues during the last downturn. From 2004 to 2007, total personal income in the state grew by about 6.7 percent each year compared to the nationwide rate of 6.2 percent during this period. North Carolina experienced faster-than-average growth in employment following the last recession, growing about 2.5 percent each year from 2004 to 2007. Nationwide, employment grew at an annual rate of 1.7 percent during this period.

■Similarly, growth in total personal income and employment from 2004 to 2007 exceeded national averages in South Carolina, Virginia, and Washington — all of which enacted significant tax increases during the recession of the early 2000s.

On the other hand, a number of states that did not raise taxes, or cut them, during the last recession subsequently saw slower-than-average economic growth. Among them are Iowa, Kentucky, Minnesota, Missouri, New Hampshire, and Wisconsin. Those states’ decision to avoid tax increases (and, in some cases, to enact large cuts in services) failed to protect them from below-average growth in both personal income and employment during the subsequent period.

 In short, neither economic theory nor experience supports the idea that states should shy away from raising taxes in a recession for fear of harming their economic  performance.

30 States have Enacted Tax Increases in Response to the Great Recession of 2008-2009

  From the Center of Budget and Policy Priorities

• In response to the current recession, 30 states this year have enacted tax increases. Another seven states are considering similar measures.
• This response is consistent with past practices. States often reduce taxes during economic expansions and increase them during downturns. In the recession of the early 1990s, some 44 states raised taxes; in the early 2000s, some 30 states did so.
• Raising taxes can reflect sound policy judgment. Tax increases can be less harmful to families and less damaging to state economies than the likely alternative: deep cuts in services.
• Federal economic recovery funds are reducing the size and extent of state tax increases. But those funds are insufficient to avert the need for tax increases.

Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output as of September 2009(Report issued on 11/20/2009)

 From the Congressional Budget Office

To read the entire report Download 11-30-ARRA

Estimating the law’s overall effects on employment requires a more comprehensive analysis than the recipients’ reports provide. Therefore, looking at the actual amounts spent so far (where identifiable) and estimates of the other effects of ARRA on spending and revenues, CBO has estimated the law’s impact on employment and economic output using evidence about how previous similar policies have affected the economy and various mathematical models that represent the workings of the economy. On that basis, CBO estimates that in the third quarter of calendar year 2009, an additional 600,000 to 1.6 million people were employed in the United States, and real (inflation-adjusted) gross domestic product (GDP) was 1.2 percent to 3.2 percent higher, than would have been the case in the absence of ARRA. Those ranges are intended to encompass most economists’ views and to reflect the uncertainty involved in such estimates.

CBO’s current estimates differ only slightly from those CBO prepared in March 2009. At that time, CBO projected that in the third quarter of 2009, U.S. employment would be higher by 600,000 to 1.5 million people with ARRA than it would be without the law, and real GDP would be 1.1 percent to 3.0 percent higher. CBO’s new estimates reflect small revisions to earlier projections of the timing and magnitude of changes to spending and revenues under ARRA. On the one hand, tax cuts through September are now estimated to be roughly $10 billion larger than originally projected (mainly because certain tax changes were carried out more quickly than anticipated); on the other hand, the net change in federal spending as a result of the legislation has turned out to be slightly smaller than CBO initially estimated.

CBO’s current estimates do not reflect any change in the agency’s assessment of the effect that each dollar of spending increase or revenue decrease has on output and employment. Since March, CBO has continued to examine new research on the relationships between changes in government policy and changes in output and employment. To date, that examination has generated no significant change in CBO’s assessment of those relationships. CBO has also examined incoming data on output and employment during the period since ARRA’s enactment. However, those data are not as helpful in determining ARRA’s economic effects as might be supposed, because isolating the effects would require knowing what path the economy would have taken in the absence of the law. Because that path cannot be observed, the new data add only limited information about ARRA’s impact. Economic output and employment in the spring and summer of 2009 were lower than CBO had projected at the beginning of the year. But in CBO’s judgment, that outcome reflects greater-than-projected weakness in the underlying economy rather than lower-than-expected effects of ARRA.

Reuters: Healthcare Reforms will Cost U.S. States Millions

(Health-care reform)Bills in both the Senate and the House of Representatives would make more people eligible for Medicaid, the health insurance program for the poor that states administer with reimbursements from the federal government.

At the same time, any bill that makes it to President Barack Obamato sign into law will likely mandate that people have health insurance. That would push more people to enrollin Medicaid and drive those numbers up even further.

To Read More: Click Cost to States

Kentucky, Indiana and 13 Other States Are Taxing the Working Poor Families Deeper in Poverty

Findings of the Center on Budget and Policy Priorities

Sixteen states taxed working-poor families deeper into poverty last year, according to a new report from the Center on Budget and Policy Priorities. Income tax bills on poor families in those 16 states ranged from a few dollars to several hundred dollars, which is a significant amount for a family struggling to make ends meet, the report said.

Among the report’s findings:

Sixteen states, out of the 42 with an income tax, taxed working-poor, married couples with two children in 2008: Alabama, Arkansas, Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Missouri, Montana, North Carolina, Ohio, Oregon and West Virginia

The number of states taxing extremely poor families of four – those with incomes below three-quarters of the poverty line ($16,513) – decreased from nine in 2007 to six in 2008. Three states that previously taxed such families began exempting them: Hawaii, Michigan, and West Virginia. States still taxing extremely poor families are: Alabama, Georgia, Illinois, Indiana, Montana, and Ohio.

Highlights Of GAO-10-151, A Report to Congressional Committee: Continued Stewardship Needed as Treasury Develops Strategies for Monitoring and Divesting Financial Interests in Chrysler and GM

November 2009

 Chrysler and GM have made changes since December 2008 to address key challenges to achieving viability, but the ultimate effect of these changes remains to be seen. The companies have eliminated a substantial amount of their long-term debt, reduced the number of brands and models of vehicles they sell, rationalized their dealership networks, and lowered production costs and capacities by reducing the number of factories and employees. It is difficult to fully assess the impact of these changes because of the short amount of time that has passed since reorganization and the low level of new vehicle sales. Moreover, Chrysler and GM are revaluing their assets and liabilities based on their reorganizations in 2009 and expect to prepare financial statements based on this effort in the coming months.

Treasury does not plan to be involved in the day-to-day management of Chrysler and GM, but it plans to monitor the companies’ performance. Treasury developed several principles to guide its role as a shareholder, including the commitment that although Treasury reserves the right to set up-front conditions to protect taxpayers and promote financial stability, Treasury will oversee its financial interests in a hands-off, commercial manner. The conditions that Treasury set for the companies include requiring that a portion of their vehicles be manufactured in the United States and that they report to Treasury on the use of the TARP funding provided. Treasury officials told us that they are also requiring that Chrysler and GM submit financial information on a regular basis and that they plan to meet with the companies’ top management on a regular basis to discuss the companies’ financial condition.

Treasury should make certain that its current approach for monitoring and selling its equity in Chrysler and GM fully addresses all important considerations financial and industry experts identified. For example, Treasury initially hired or consulted with a number of individuals with experience in investment banking or equity analysis to help assess Chrysler’s and GM’s financial condition and develop financing packages for the companies. Many of these individuals have recently left as the restructuring phase of Treasury’s work has been completed. Treasury will need to ensure these staff and any staff that depart in the future are replaced as needed with similarly qualified personnel. Also, Treasury does not currently contract with or employ outside firms with specialty expertise for its work with the auto industry but may need to do so in the future, to make sure sufficient expertise is available to oversee the government’s significant financial interests in Chrysler and GM. In addition, although Treasury officials told us they are considering all options for divesting the government’s ownership interests, including an initial public offering or private sale, they have focused primarily on a series of public offerings for GM and have not identified criteria for determining the optimal time and method to sell. Regardless of the option pursued, however, Treasury is unlikely to recover the entirety of its investment in Chrysler or GM, given that the companies’ values would have to grow substantially above what they have been in the past.

To read the entire report Download D10151