House just passed the $1.15 trillion omnibus spending bill by a vote of 316-113. The omnibus was released earlier this week. It now heads to the Senate for passage later this afternoon.
Category: Congressional To Do
Tax Extenders Bill Released
House Republicans unveiled a $650 billion permanent tax package early Wednesday morning. Key elements of the package were the permanent extensions of the research and experimentation tax credit and several charitable donation tax breaks.
Sections of note include:
Section 102. Enhanced American opportunity tax credit is made permanent. The Hope Scholarship Credit is a credit of $1,800 (indexed for inflation) for various tuition and related expenses for the first two years of post-secondary education. It phases out for AGI starting at $48,000 (if single) and $96,000 (if married filing jointly) – these amounts are also indexed for inflation. The American Opportunity Tax Credit (AOTC) takes those permanent provisions of the Hope Scholarship Credit and increases the credit to $2,500 for four years of post-secondary education, and increases the beginning of the phase-out amounts to $80,000 (single) and $160,000 (married filing jointly) for 2009 to 2017. The provision makes the AOTC permanent.
Section 112. Extension of tax-free distributions from individual retirement plans for charitable purposes. The provision permanently extends the ability of individuals at least 70½ years of age to exclude from gross income qualified charitable distributions from Individual Retirement Accounts (IRAs). The exclusion may not exceed $100,000 per taxpayer in any tax year.
Section 121. Extension and modification of research credit. The provision permanently extends the research and development (R&D) tax credit.
Section 153. Extension of above-the-line deduction for qualified tuition and related expenses. The provision extends through 2016 the above-the-line deduction for qualified tuition and related expenses for higher education. The deduction is capped at $4,000 for an individual whose AGI does not exceed $65,000 ($130,000 for joint filers) or $2,000 for an individual whose AGI does not exceed $80,000 ($160,000 for joint filers).
Section 211. Employer identification number required for American opportunity tax credit. The provision requires a taxpayer claiming the American opportunity tax credit to report the employer identification number (EIN) of the educational institution to which the taxpayer makes qualified payments under the credit. The provision applies to tax years beginning after December 31, 2015, and expenses paid after such date for education furnished in academic periods beginning after such date.
Section 212. Higher education information reporting only to include qualified tuition and related expenses actually paid. The provision reforms the reporting requirements for Form 1098-T so that educational institutions are required to report only qualified tuition and related expenses actually paid, rather than choosing between amounts paid and amounts billed, as under current law. The provision applies to expenses paid after December 31, 2015 for education furnished in academic periods beginning after such date.
Section 302. Improvements to section 529 accounts. The provision expands the definition of qualified higher education expenses for which tax-preferred distributions from 529 accounts are eligible to include computer equipment and technology. The provision modifies 529-account rules to treat any distribution from a 529 account as coming only from that account, even if the 11 individual making the distribution operates more than one account. The provision treats a refund of tuition paid with amounts distributed from a 529 account as a qualified expense if such amounts are re-contributed to a 529 account within 60 days. The provision is effective for distributions made or refunds after 2014, or in the case of refunds after 2014 and before the date of enactment, for refunds re-contributed not later than 60 days after date of enactment.
For more provisions, a section-by-section summary can be found here.
Transportation Reauthorization Agreement Reached
An agreement was announced this Tuesday afternoon after a majority of conferees signed off on the package with days to spare before the short-term reauthorization expires on Friday, December 4th. The mammoth deal, which authorizes for highway and transit programs, as well as Amtrak, through fiscal year 2020, is set to move through the House and Senate this week.
The agreement provides roughly $305 billion for federal transportation programs and outlines the policy that will govern highway, transit and rail spending for the next five years.
The measure requires offsets for a general fund transfer to the Highway Trust Fund of around $70 billion, of which about $51.9 billion would go to highways and $18.1 billion to mass transit.
Negotiators said they reluctantly included many the pay-fors, including a plan to use a billion of Federal Reserve funds (cutting the dividend the Federal Reserve pays to certain member banks, tapping the Federal Reserve surplus account meant to help the central bank absorb losses), selling a portion of the Strategic Petroleum Reserve, and a separate idea to funnel revenue from a customs fee levied on airline and cruise passengers to the highway fund.
The bill also includes a provision to revive the Export-Import Bank, an export-promoting agency that expired last summer amid attacks from conservatives, but does not contain renew the 9/11first responders heathcare program.
The bipartisan deal is expected to pass both chambers. However, it is unclear how fast House and Senate leadership can shepherd it through, potentially necessitating one more short-term extension before Friday.
A five year deal is a huge win for Speaker Paul Ryan (R-WI) who can show a return to regular order for the House after the tumultuous last few years of Speaker Boehner’s tenure. Delivering a long-term, fully funded highway and transit bill to the White House would be a major coup — the first time Congress has accomplished the feat since George W. Bush was in the White House.
Senate Passes Budget Around 3 am
The Senate cleared a bipartisan budget and debt limit accord early Friday morning which would send the legislation to the President’s desk. Roughly 72 hours after it was unveiled and buying roughly two years of relative budgetary stability after months of partisan sniping on spending, the Senate passed HR1314 shortly after 3 am. The House passed the measure Wednesday evening.
Just after 3 am, the upper chamber passed the deal by a vote of 64-35, roughly 90 minutes after voting to cut off debate on the legislation. Eighteen Republicans voted in favor of final passage, including Senate GOP Leadership, while 35 Republicans voted against the measure. Forty-four Democrats and two independent senators who conference with Democrats backed the package. See the vote total here.
The budget deal would raise discretionary spending caps for defense and nondefense accounts by $80 billion above the sequester level for fiscal 2016 and fiscal 2017 and suspend the debt limit until March 15, 2017. The increased discretionary spending is offset with cuts to various entitlement programs and revenue raisers.
Ryan Elected as Speaker
Boehner has given his farewell and ends his five-year tenure in the bio. The House has elected Rep. Paul D. Ryan, a 45-year-old Republican, to Speaker.