Who can resist a war funding bill on Memorial Day? As we expected, a version of the war funding bill finally made it through Congress – and this time, it has a chance of escaping the presidential veto.
The bill, with the concise and inauspicious title of “U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007″ (also referred to as H.R. 2006) allowed President Bush some measure of war funding and increased the federal minimum wage.
By some measure of funding, I mean an additional $93,018,295,000 (give or take a few billion, depending on how you categorize the funds) in supplemental war spending. That doesn’t include “emergency” sums to Department of State related activities like $836,555,000 in Diplomatic and Consular Programs, $20,000,000 for Educational and Cultural Programs, $283,000,000 to “Contributions for International Peacekeeping Activities” and $10,000,000 for broadcasting activities in the Middle East or the $57,400,000 to be paid to nongovernmental organizations in Iraq. It also doesn’t include more than $101,500,000 in refugee and immigration-related funds and an additional $27,500,000 previously unbudgeted funds for “Nonproliferation, Anti-Terrorism, Demining and Related Programs”. Bush was also allotted $220,000,000 in unrestricted military funding (no, that’s not political, it was actually titled “Funds Appropriated to the President”).
Oh, and there’s Katrina in the title. Congress and the President didn’t forget about Katrina victims, although relatively speaking (compared to the other expenses, it might feel like it). An additional $3,400,000,000 was granted for Katrina relief. There’s some mention of spending more than $100 million on research on the fishing and shrimping industry and $20,000,000 for NASA to “explore the consequences of Hurricane Katrina” – yes, NASA. And otherwise, there’s an additional $710,000,000 for “Disaster relief.”
And since Congress and the President are spending money on so-called emergency expenditures, they must have thought, why not throw in some extra money for salaries in the US? So, they are setting aside $139,740,000 in salary to clean up after the FBI investigation into the National Security Letters, handing the DEA an additional $3,698,000 and putting aside $75,000,000 for border patrol activities. The House also voted themselves an additional $6,437,000 in salaries and expense for “business continuity and disaster recovery.”
Approximately $1.9 billion (my hands are cramping from typing out all of the zeroes) is set aside for defense health programs. There’s money for aviation security, homeland security, FEMA, USCIS background checks, air cargo security research, wildland fire relief, the International Religious Freedom fund (who knew?), the Democracy fund, avian flu, mine safety, asbestos abatement for the Capitol building, and payments to the heirs of deceased Congressional members… We’re also helping Liberia get rid of some of its debt.
But lest you thinking the spending is wildly out of control, we are apparently rescinding our agreement to spend $13,000,000 to buy a maritime patrol aircraft for the Navy… the Colombian Navy.
While reading the bill, at some point, considering these were “emergency” or supplemental expenditures, in addition to our existing budget, my head began to hurt. I wondered if our Congressional officials even noticed the trailing zeros behind some of these appropriations… Reading the bill was an exercise in frustration.
And I began to wonder, like I am sure you are, how are we going to pay for it?
Well, we get to that after about 170 pages of spending.
For one, the federal minimum wage is being raised over 2 years to $7.25/hour. You can look at that as a revenue raiser in one of a couple of ways depending on your political leanings. You can look at it as more money to tax, thus, more revenue (it represents a full time salary boost of more than $4k/year per person). You can look at it as less services to be provided since people are making more money. Or you can look at it as more money being put into the economy stream, thus boosting the tax revenues for all. Take your pick.
There are also changes to the Tax Code, including:
- extension of the work opportunity tax credit
- an increase in the maximum Section 179 deduction (a deduction for property that’s expensed in one year as opposed to depreciated over several years) to $125,000, for taxpayers who purchase up to $500,000 of qualifying property
- “family business tax simplification” for spouses which basically allows a husband and wife with a qualified business venture who file jointly to not be taxed as a partnership
- some s corporation clean up provisions, including that capital gains from stock or securities are no longer classified as “passive investment income” for the corporate-level tax on c corporations
- the application of the “kiddie tax” for children who are 18 years old or who are full-time students over age 18 but under age 24
- the suspension of accrual of interest and certain penalties starting 36 months after the filing of the tax return if the IRS has not sent the taxpayer a notice specifically stating the taxpayer’s liability and the basis for the liability when the taxpayer would otherwise not be aware that tax was due
- the IRS is permanently empowered to charge user fees for certain kinds of letters and rulings
- increase in penalties for bad checks and money orders for the payment of taxes and fees
- increase in penalties for tax-preparers who prepare returns which understate a taxpayer’s liability
- increase in penalties for claiming false refunds
- imposition of a requirement for corporations to pay 114.25% of the tax due for the third quarter of 2012 as estimated tax payments to avoid penalties (and reduces the next quarter accordingly)
and of course, our old favorite,
- technical corrections.
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