Congress’ Tax Agenda: Businesses Before Working Families

— by Alexandra Thornton and Samuel Rubinstein

As Congress digs into its fall legislative agenda, one important item of business it faces is which expiring tax provisions to extend and for how long. So far, the Senate has managed to sidestep this question by approving a bill that extends many already expired provisions for two years. The House of Representatives, on the other hand, has passed bills that make selected expiring provisions permanent. Unfortunately, these bills strongly favor businesses at the expense of working families.

The House voted to make permanent two expiring provisions—known as the R&D credit and Section 179 expensing—that have obvious benefits for corporations and other businesses. However, 2009 changes to the existing Earned Income Tax Credit, the Child Tax Credit, and the American Opportunity Tax Credit—which helped lift an additional 1.8 million Americans out of poverty and provided needed support for higher education—are all due to expire in 2017 unless Congress takes action. For roughly the same amount of money as the R&D credit and Section 179 extensions, Congress could permanently extend the 2009 temporary expansions of three tax provisions that benefit working families and their children.

Read more …


This material [the article above] was created by the Center for American Progress Action Fund. It was created for the Progress Report, the daily e-mail publication of the Center for American Progress Action Fund. Click here to subscribe.

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The ACA Has Spurred The Largest Expansion In Health Coverage In America In Half A Century

Yesterday marked the last day of the six-month open enrollment period for people to get insurance coverage through the state and federal marketplaces. Despite technical challenges and staunch ideological opposition, it has already been a huge success with over six million people enrolling. But in the last several days, the interest in signing up and the outreach efforts to those not yet covered has reached new heights.

Take a look at the final surge by the numbers:

  • 9.5 Million: Number Of Uninsured That Now Have Insurance Thanks To The ACA. A new analysis of enrollment data has found that almost ten million people who were previously without health insurance now are covered. The report estimates that two million have enrolled in private coverage on the new marketplaces; about 4.5 million previously uninsured people have gained public coverage through Obamacare’s Medicaid expansion; and about three million previously uninsured young people are now covered on their parents’ insurance plans. The law, as written by the Los Angeles Times, “has spurred the largest expansion in health coverage in America in half a century.”
  • 10 million: Number Of Visits To Heathcare.gov In The Past Week. The Washington Post tallied 8.7 million in the past week through Monday morning, with 2 million visiting this weekend alone. Today, the Department of Health and Human Services tweeted that there had been another 1.2 million visitors just by noon–”record volume.”
  • 125,000: The Number Of Concurrent Users On Healthcare.gov On Monday. An unprecedented level of traffic on the website has led to an unprecedented number of people using the site to sign up for health insurance.
  • 4,000: Number Of Grassroots Events To Help People Enroll In March. For all the money spent over the airwaves, grassroots organizing was a huge component of outreach efforts to get people signed up for coverage. Events took place all over the country, with a focus on reaching the uninsured to make sure they had the information they needed to enroll.
  • 300: Number of Radio Interviews Administration Officials Have Given In The Past Six Weeks. While there have been enormous efforts to use new media to promote the law, good old-fashioned radio has been a go-to source for top White House officials: from Chief-of-Staff Denis McDonough and Senior Adviser Valerie Jarrett to President Obama himself.
  • 49 Percent: Public Support For The ACA. According to a ABC News/Washington Post poll out today, support for the law is at 49 percent, its highest level in months. Back in November, just 40 percent supported and 57 percent opposed the law; today the picture looks much different:

BOTTOM LINE: If there’s any indication that the Affordable Care Act is in high demand, this is it. The law is working, it’s here to stay, and it’s delivering on its promise to provide quality, affordable health coverage that will be there when consumers need it most. Conservatives will continue their repeal-at-all-costs agenda, but the success of these past six months will make it harder because people do not want to go back to the way it was.


This material [the article above] was created by the Center for American Progress Action Fund. It was created for the Progress Report, the daily e-mail publication of the Center for American Progress Action Fund. Click here to subscribe.

Paul Ryan’s Budget Makes Wild New Claims About Obamacare

— BY IGOR VOLSKY, ThinkProgressPaul Ryan

CREDIT: AP

As Obama administration moves closer to meeting it original goal of enrolling 7 million people in the Affordable Care Act’s new insurance marketplaces, Rep. Paul Ryan (R-WI) has released a budget that repeals the law and asks Congress to “pursue patient-centered health-care reforms that actually bring down the cost of care by empowering consumers.”

And while this new Fiscal Year 2015 budget borrows heavily from previous versions, the April 1st release is far more critical of Obamacare. In a possible preview of the GOP’s election-year rhetoric, this year, Ryan warns — in almost apocalyptic terms — that the law “will undermine the private insurance” and “the competitive forces of the marketplace.” He even argues that it would “eventually lead to a single-payer system.” Here is a comparison between last year’s blueprint and Tuesday’s release:

Fiscal Year 2014: Repeal the health-care law’s exchange subsidies

The new law couples these subsidies with a mandate for individuals to purchase health insurance and bureaucratic controls on the types of insurance that may legally be offered. Taken together, these provisions will weaken the private-insurance market. Exchange subsidies take the health-care market in the wrong direction, breaking what’s working at a time when policymakers need to fix what’s broken. Government mandates will drive out all but the largest insurance companies. Punitive tax penalties will force individuals to purchase coverage whether they want it or not. Further, the law does not condone any policy that would require entities or individuals to finance activities or make health decisions that violate their religious beliefs.

This budget repeals the President’s onerous health-care law. Instead of putting health-care decisions into the hands of bureaucrats, Congress should pursue patient-centered health-care reforms that actually bring down the cost of care by empowering consumers.

Fiscal Year 2015: Repeal the Exchange Subsidies Created by the New Health-Care Law.

The new law couples these subsidies with a mandate for individuals to purchase health insurance and bureaucratic controls on the types of insurance that may legally be offered. Taken together, these provisions will undermine the private insurance market, which serves as the backbone of the current U.S. health-care system. Exchange subsidies will undermine the competitive forces of the marketplace. Government mandates will drive out all but the largest insurance companies. Punitive tax penalties will force individuals to purchase coverage whether they choose to or not. Further, this budget does not condone any policy that would require entities or individuals to finance activities or make health decisions that violate their religious beliefs. This budget provides for the repeal of the President’s onerous health-care law for this and many other reasons.

Left in place, the health law will create pressures that will eventually lead to a single-payer system in which the federal government determines how much health care Americans need and what kind of care they can receive. This budget recommends repealing the architecture of this new law, which puts health- care decisions into the hands of bureaucrats, and instead allowing Congress to pursue patient centered health-care reforms that actually bring down the cost of care by empowering consumers.

Interestingly, while Ryan goes to great lengths to criticize the ACA’s “government mandates” and the supposed decision to leave “health- care decisions into the hands of bureaucrats,” he praises this very same kind of government-control elsewhere in the budget.

For instance, in discussing his plan to allow future retirees the choice of private insurance through his “premium support” proposal, Ryan promises that “the Medicare program and its benefits will remain as they are, without change.” For future retirees, Ryan proposes an Obamacare-like exchange that will feature private insurers providing Medicare-like plans. However, Ryan tasks the government with policing the plans private insurers offer “to avoid cherry-picking, and to ensure that Medicare’s sickest and highest-cost beneficiaries receive coverage.” Just four pages earlier, Ryan criticizes such government intervention in the exchanges.

Republicans have already voted to repeal the Affordable Care Act in full or in part at least 51 times and on Monday, House Speaker John Boehner (R-OH) doubled down on his commitment to hold more repeal votes. “House Republicans will continue to work to repeal this law and protect families and small businesses from its harmful consequences,” he said. “We will also continue our work to replace this fundamentally-flawed law with patient-centered solutions focused on lowering health care costs and protecting jobs.” House leadership has also pledged to introduce a unified alternative to the health care law, although they have not provided a timeline for drafting or debating that measure.


This material [the article above] was created by the Center for American Progress Action Fund. It was created for the Progress Report, the daily e-mail publication of the Center for American Progress Action Fund. Click here to subscribe.

Fast Food Giants Gorge on Subsidies

Thanks to a loophole that subsidizes CEO pay, McDonald’s, Yum Brands, Wendy’s, Burger King, Domino’s, and Dunkin’ Brands trimmed $64 million from their tax bills in 2011 and 2012.

By Sarah Anderson

Sarah Anderson

The fast food industry is notorious for handing out lean paychecks to their burger flippers and fat ones to their CEOs. What’s less well-known is that taxpayers are actually subsidizing fast food incomes at both the bottom — and top — of the industry.

Take, for example, Yum Brands, which operates the Taco Bell, KFC, and Pizza Hut chains. Wages for the corporation’s nearly 380,000 U.S. workers are so low that many of them have to turn to taxpayer-funded anti-poverty programs just to get by. The National Employment Law Project estimates that Yum Brands’ workers draw nearly $650 million in Medicaid and other public assistance annually.

Meanwhile, at the top end of the company’s pay ladder, CEO David Novak pocketed $94 million over the years 2011 and 2012 in stock options gains, bonuses and other so-called “performance pay.” That was a nice windfall for him, but a big burden for the rest of us taxpayers.

Under the current tax code, corporations can deduct unlimited amounts of such “performance pay” from their federal income taxes. In other words, the more corporations pay their CEO, the lower their tax burden. Novak’s $94 million payout, for example, lowered Yum’s IRS bill by $33 million. Guess who makes up the difference?

fast food ceos

My new Institute for Policy Studies report calculates the cost to taxpayers of this “performance pay” loophole at all of the top six publicly held fast food chains — McDonald’s, Yum, Wendy’s, Burger King, Domino’s, and Dunkin’ Brands.

Combined, these firms’ CEOs pocketed more than $183 million in fully deductible “performance pay” in 2011 and 2012, lowering their companies’ IRS bills by an estimated $64 million. To put that figure in perspective, it would be enough to cover the average cost of food stamps for 40,000 American families for a year.

After Yum, McDonald’s received the second-largest government handout for their executive pay. James Skinner, as CEO in 2011 and the first half of 2012, pocketed $31 million in exercised stock options and other fully deductible “performance pay.” Incoming CEO Donald Thompson took in $10 million in performance pay in his first six months on the job. Skinner and Thompson’s combined performance pay translates into a $14 million taxpayer subsidy for McDonald’s.

What makes all this even more galling is that these fast food giants are pocketing massive taxpayer subsidies for their CEO pay while fighting to keep their workers’ wages at rock bottom. All of the big fast food corporations are members of the National Restaurant Association, which is aggressively working to block a raise in the federal minimum wage to a level that would let millions of fast food workers make ends meet without public support.

There’s an easy solution to the perverse “performance pay” loophole. A bill introduced by Senators Jack Reed (D-RI) and Richard Blumenthal (D-CT) would simply set a firm $1 million cap for executive pay deductions — with no exceptions. Corporations could still pay their CEOs whatever they choose, but at least taxpayers wouldn’t be subsidizing anything above $1 million. The Joint Committee on Taxation estimates this legislation would generate more than $50 billion over 10 years.

It makes no sense for employees of highly profitable giant corporations to have to rely on government assistance for basic needs. It makes even less sense for ordinary taxpayers to subsidize the CEOs who are benefiting most from the fast food industry’s low-road business model.

With Congress again mulling deficit-reduction strategies, it’s high time that Washington stopped letting fast food giants gorge on both of these absurd subsidies.


Sarah Anderson directs the Global Economy Project at the Institute for Policy Studies and is the author of the new report Fast Food CEOs Rake in Taxpayer-Funded Pay. IPS-dc.org
Distributed via OtherWords (OtherWords.org)

39 Days left in this Congressional Session

Congress is back on today from August recess, and it faces two big issues in its first full week of work:  whether to approve military action in Syria and a 2014 federal spending.

Authorizing Military Action in Syria 

On Aug. 31, the President sent Congress draft legislation that would authorize use of the US military “in connection with the conflict in Syria.” In the past week, more than 2,700 POPVOX users weighed in on the President’s proposal — overwhelmingly in opposition — and even the media took note: Check out POPVOX on NBC news and The Hill.

Last week, the Senate Foreign Relations Committee approved its resolution to authorize the limited and specified use of the US Armed Forces. The resolution allows up to 90 days of military action against Syria, and due to a bipartisan amendment in committee, it allows the Administration to take steps to change the “momentum on the battlefield” to help Syrian rebels.  Weigh in on the Senate’s resolution at POPVOX.

  • The resolution passed the Senate Foreign Relations Committee in a close 10-7 vote, and the Obama Administration will be pushing Senators to support it before this week’s vote. It’s not yet clear if the Senate can pass the resolution given scant public support for a new military campaign, even one that the Administration says would be very limited and would not involve ground troops. Meanwhile, House leaders have indicated they would let the Senate act first, and might consider Syria language later in the month. There’s also a chance the House doesn’t vote at all, particularly if the Senate fails to pass its language.

Learn more and find other bills related to Syria in PopVox’s Issue Spotlight.

2014 Federal Spending 

The House will take the lead on 2014 spending, by considering a short-term continuing resolution. The plan is to allow the government to operate for the first few months of the new fiscal year, so Congress can spend time working on a debt ceiling agreement. As of Friday, the House had not revealed the text of the continuing resolution it hopes to pass.

Also in the House

The No Subsidies Without Verification Act (HR 2775): would prohibit any federal subsidies for Obamacare’s health insurance exchanges from being provided until there is a system in place that verifies eligibility as outlined by current law, according to the bill sponsor.

  • HR2775 reflects Republican disapproval of an Obama administration decision not to verify eligibility of people receiving subsidies. Many Republicans said failing to see if people qualify for these subsidies will only lead to more demand for the payments, which would drive up the costs of Obamacare.

Finally, the House will consider several suspension bills early in the week, including several Senate land use bills:

As you can see, Immigration Reform is nowhere on the House agenda at this point.