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Entries in Congress (51)

Tuesday
Oct022012

Tax Policy Center Spells Out Repercussions of 'Fiscal Cliff'

Comstock/Thinkstock(NEW YORK) -- Watch out for the 'fiscal cliff.'  A new study forecasts that unless Congress acts, soaring taxes at the beginning of next year could blow a hole in your wallet.

The nonpartisan Tax Policy Center said on Monday that taxes would rise an average of $3,500 per household, thus slicing after-tax income by over 6 percent.

In other words, there'll be less money to spend, businesses will have to lay off staff and the country will likely experience another recession although not quite as bad as the previous one.

Still, no one wants that to happen but any action on Capitol Hill, which is deserted now because of the election season, won't happen until the proverbial lame duck session, if at all.

According to the Tax Policy Center, those at the top 1 percent of the pay scale will see taxes increase by a whopping $120,000 while those at the bottom will see an average of $412 in additional taxes.

Americans earning between $40,000 and $65,000 a year will pay an average of $2,000 more in taxes annually.

Overall, collective taxes will go up $536 billion in 2013.  Most of it has to do with the expiration of tax breaks passed in 2001 and 2003 as well as the payroll tax holiday that began in 2009 also ending.

The White House and Republicans have been at loggerheads over what to about the expiring tax cuts, with the GOP wanting to extend them for all Americans while President Obama and Democrats say that anyone earning $250,000 or more should pay more to help bring down the deficit.

Copyright 2012 ABC News Radio

Thursday
Jul122012

Lawmaker Proposes Keeping Families Together In-Flight

Photodisc/Thinkstock(NEW YORK) -- A New York congressman and member of the House Transportation and Infrastructure Committee has introduced legislation to help keep families seated together on commercial flights.

The Families Flying Together Act of 2012 would require the U.S. Department of Transportation to direct each carrier to “establish a policy to ensure, to the extent practicable, that a family that purchases tickets for a flight with that air carrier is seated together during that flight; and (2) make the policy... available to the public on an appropriate Internet Web site of the air carrier.”

Two airlines – Allegiant Air and Spirit Airways – charge for advance seat assignments, which means families who want to guarantee they’re going to be seated together will have to pay extra.  And while other airlines might not charge for an advance seat assignment, they might charge more for window or aisle seats, making it difficult to find seats together for free.

Rep. Jerrold Nadler’s legislation would help to ensure that children are not separated from their families and seated alone on flights.

“Air travel is complicated and expensive enough for families without adding new stresses,” Nadler, D-N.Y., said in a news release.  “Families should not be stuck paying hidden fees, or buying ‘premium’ seats, simply because they wish to be seated together on crowded flights.  It is positively absurd to expect a 2 or 3-year-old to sit unattended, next to strangers, on an airplane.  It is up to air carriers to make their seating policies clear and easily accessible to the public.”

Copyright 2012 ABC News Radio

Thursday
Jul122012

Former Clinton Advisor: ‘We Are Going Over the Fiscal Cliff’

iStockphoto/Thinkstock(WASHINGTON) -- Three of the country’s most prominent minds on U.S. budgetary problems issued a stark warning to lawmakers today as Congress approaches what many have called a “fiscal cliff” of tax hikes and spending cuts that are set to take effect Jan. 1.

Erskine Bowles, who served as President Clinton’s chief of staff, former Sen. Alan Simpson and billionaire investor Warren Buffet all expressed pessimism as to whether Congress and President Obama could reach a compromise to reduce the debt and avoid another fiscal crisis, during an interview with CNBC  Thursday morning.

While both Republicans and Democrats have said they do not want to let all the tax cuts expire and plan to stave off the bulk of the spending cuts, Bowles said partisan politics would likely thwart any deal to avoid the looming taxmageddon.

“I think if I had to tell you the probability, I’d say the chances are we are going over the fiscal cliff,” Bowles said. “I hate to say it, but I think that’s probably right.”

Bowles, whom Obama appointed, along with Simpson, to create a bipartisan debt-reduction plan, said today that because debt reduction was “politically painful” and “really tough,” it was not likely Congress and the president would make the tough choices to reform entitlements, cut spending and simplify the tax code, as the Bowles-Simpson plan suggests.

“I think that if we don’t get these politicians to come together we face the most predictable economic crisis in history,” Bowles said during this morning’s interview in Sun Valley, Idaho. “I think it’s absolutely clear that the fiscal path we are on is not sustainable, and for me, the best analogy is these deficits are like a cancer, and over time they will destroy the country from within.”

The Congressional Budget Office estimated that if the Bush tax cuts were allowed to expire and the automatic spending cuts went into effect, the country would plunge back into a recession.

Bowles said that “every nickel” the country brings in each year only paid for interest on the debt and mandatory spending on entitlement programs, such as Medicare, Medicaid and Social Security.

“What that means is every single dollar we spent last year on these two wars, national defense, homeland security education infrastructure, high value-added research, every dollar was borrowed and half of it was borrowed from foreign countries,” he said. “That is crazy. Crazy! It’s a formula for failure in any organization.”

But while Democrats and Republicans bicker in Washington over which party was to blame for the current fiscal problems, Simpson said it’s the average American who pays the price.

“When the tipping point comes and the guys who gave us money want more money for their money inflation … and all these things in interest, guess who will be hurt the worst? The little guy that everybody talks about day and night,” Simpson said. “What fakery. What phoniness."

“What that means is every single dollar we spent last year on these two wars, national defense, homeland security education infrastructure, high value-added research, every dollar was borrowed and half of it was borrowed from foreign countries," he continued. "That is crazy. Crazy! It’s a formula for failure in any organization.”

Copyright 2012 ABC News Radio

Friday
Jul062012

Report: Countrywide Gave Discounted Home Loans to Capitol Hill Insiders

Digital Vision/Thinkstock(WASHINGTON) -- A House committee report on the now-defunct subprime lender Countrywide Financial Corporation shows the company tried to win and influence friends in Washington by arranging discounted home loans for some members of Congress, as well as congressional aides and government officials.

The House Oversight and Government Reform Committee reviewed more than 60,000 pages of documents and discovered Countrywide’s special VIP unit arranged discounted loans for a half-dozen current or former members of Congress, key aides and certain government officials.

Congressional investigators say there was no specific favor sought or granted in exchange for the discounted home loans, but Countywide did gain influence on Capitol Hill.  The report shows many of the recipients of the special mortgages were linked to several financial reform proposals that, had they passed, would have prevented some of the issues that led to the collapse of the housing market.

Former Countywide chief executive Angelo Mozillo was never sent to prison for violating federal law, but he did agree to pay $67 million in penalties and never again be involved in running a publicly-traded company.

While Countrywide was giving politicians and other Washington insiders VIP treatment, it was providing just the opposite to average Americans.  A government study in 2010 found that Countrywide improperly imposed fees on people who were late on mortgage payments and were in default.

In 2011, Bank of America, which had acquired Countrywide three years earlier, agreed to pay $335 million to settle charges that Countrywide discriminated against blacks and Hispanics seeking to buy homes between 2004 and 2008.  The Justice Department said at the time that Countrywide regularly charged minorities higher fees and interest rates while steering borrowers into risky subprime mortgages, a major factor in the collapse of the housing market.

Copyright 2012 ABC News Radio

Sunday
Jul012012

Moody's Should Downgrade Congress

Ryan McVay/Photodisc/Thinkstock(NEW YORK) -- Last summer, August 5 to be exact, Standard & Poor's dropped the rating of United States debt below AAA for the first time in history. This year, with our flippers and masks barely out of the pool equipment room, Moody's downgraded the ratings of fifteen mega banks, including major American institutions such as Goldman Sachs and J.P. Morgan Chase. Bank of America and Citigroup were downgraded to Baa2, just two ticks above "junk" status.

S&P cited as one of the major reasons for last summer's historic downgrade the "Bedtime for Bonzo" antics that went on in Congress in connection with, among other things, the once perfunctory act of raising the national debt limit. If you were otherwise engaged and missed the circus, don't worry, it will be coming back to town near election time this year.
Moody's, on the other hand, did not have to make reference to our political paralysis (yet), they simply underscored our "globalized" exposure to the financial chaos in the Eurozone, describing its actions as follows: "Moody's downgrades firms with global capital markets operations;" which, among other things was a not-so-subtle reference to the recent revelation that J.P. Morgan Chase had casually dropped another $2-3 billion in a "whaling adventure" that went awry, a fact that produced a flurry of congressional posturing — filled with sound and fury — that seemed to signify very little.

Meanwhile a host of Washington conservatives are continuing their efforts to undermine Dodd-Frank by introducing a series of nine bills in the House and the Senate and launching litigation (with a willing co-conspirator — a bank in Texas) against the Consumer Financial Protection Bureau and select provisions of the law.

The S&P downgrade was a direct response to Congressional debt devilry, while the Moody's downgrade was considered by many to be an unspoken but pointed commentary on both globalization and the dismal performance of federal regulation of the banking industry as a whole. There are those who argue that that the banking industry is over regulated while others opine that it is under-regulated. However, it's very difficult to argue that given the history of financial events in the last few years, the banking industry is effectively regulated.

To top it all off, the Washington Post recently reported that during the ugliest days of the of the financial crisis, 34 members of Congress on both sides of the aisle had reworked their own financial portfolios after having interacted with Hank Paulson, Ben Bernanke, or Timothy Geithner. As you might imagine, those legislators managed to catch an earlier "flight to safety" than most of us. It would be hard to imagine anything more "extractive" than that, wouldn't it?

This is not an easy fix to be sure. Our economy has become so complex many would argue that it can't be effectively regulated. Let's hope they're wrong and that our representatives will have an epiphany that lifts them from the tar pit of partisanship, election year or not, and makes them leaders, not slaves to ideology or Grover Norquist inspired oaths. They must screw up the courage to get this thing right. If they fail, once again, the consequences are far worse than winning or losing an election. Because if we don't fix this problem — how shall I put this delicately? — we're screwed.

Copyright 2012 ABC News Radio

Friday
Jun292012

Congress Passes Transportation Extension with Student Loan Fix

iStockPhoto/Thinkstock(WASHINGTON) -- After months of wrangling, arm-twisting, bitter debate and closed-door negotiations, Congress finally has a bipartisan deal for the American people. Just in time.

The agreement, which couples a student loan interest rate extension with a long-awaited boost for infrastructure, passed the House first, 373-52. A short time later, the Senate approved the deal 74-19, with one senator voting ‘present.’

For months, progress stalled as Republicans debated internally over a long-term highway bill and Congress searched for an agreeable method to prevent new subsidized Stafford loan rates from doubling from 3.4 to 6.8 percent on July 1. The deal extends current rates for another year for approximately 7.6 million students signing up for new loan agreements.

House Democratic Whip Steny Hoyer, D-Md., blamed Republicans for taking Congress “to the brink,” but he said the bipartisan deal gives “certainty to millions of students and that will pave the way for jobs and economic growth.”

“Keeping these rates low recognizes the challenges our graduates face in today’s tough job market,” he stated. “Let us continue in the spirit of bipartisanship that enabled us to pass this bill and work together to meet the challenges we face as a nation.”

After months of disagreeing over how to pay for the $6 billion bill, legislators finally came together late this week over how the bill would be financed. About $5 billion of the cost will be offset by “smoothing,” a tactic that creates a “stabilization range” for employers to compute their pension liabilities and around $500 million collected by increasing Pension Benefit Guaranty Corporation fees.

Currently there are no limits in place for how many years a student could receive a Stafford loan subsidy, but $1.2 billion of the cost of the extension would be recovered by limiting access to the loan to six years for a 4-year degree.

“Republicans and Democrats worked hard to find common ground,” Senate Minority Leader Mitch McConnell, R-Ky., said Friday morning. “The agreement we’ve reached will ensure that college students who are already facing enormous challenges in the Obama economy won’t be paying higher interest rates next month.”

Tucked into the deal are two other critical pieces of legislation set to run out of money soon: the highway bill that has plagued both chambers and an extension of the National Flood Insurance Program, which was due to expire at the end of July.

As the hurricane season looms, the agreement extends funding for flood insurance until September of 2017.

For months, the House was unable to pass its version of the highway bill, instead opting eventually for a short-term extension to give negotiators another 90 days to work out a deal. But that temporary patch was set to expire Saturday, threatening federal highway and transit aid programs and the government’s authority to levy federal fuel taxes expire, and putting about 4,000 jobs at the Department of Transportation at risk.

The agreement funds federal highway, transit and highway safety programs at current levels through the end of FY 2014. It does not include earmarks or increase spending and is fully offset with many reforms included in the Senate-passed highway bill.

“We speed up project delivery, cut red tape, and do it without jeopardizing environmental laws,” Sen. Barbara Boxer, who led the negotiations from the Senate-side, said. “For the first time, we send half of the funds for bike paths and pedestrian walkways directly to local entities, and we protect those funds while giving states more flexibility on their share.”

The Keystone XL Pipeline was left out of the final deal, breaking off 52 hard-line House Republicans from supporting the deal. As a result House Democrats helped carry the vote, with none opposing.

Republicans are already promising another run at Democrats for opposing the pipeline, which they contend would create tens of thousands of jobs.

Copyright 2012 ABC News Radio

Tuesday
May082012

Obama Gives Congress To-Do List on Jobs, Economy

SAUL LOEB/AFP/Getty Images(ALBANY, N.Y.) -- Jabbing Congress for its inaction, President Obama Tuesday outlined an election-year “to-do list” for lawmakers, urging them to act on his proposals to boost the economy and spur job growth.

“I know this is an election year, but it’s not an excuse for inaction. Six months is plenty of time for Democrats and Republicans to get together and do the right thing, taking steps that will spur additional job creation right now,” the president told students at the State University of New York in Albany.

The president is using his “handy little to-do list” to portray Republicans in Congress as standing in the way of his economic agenda. “Just saying no to ideas that we know will help our economy isn’t an option.  There’s too much at stake,” he said. “So even if Republicans are still saying no to some of the bigger proposals...there are some additional ideas that could help people get to work right now and that they haven’t said no to yet.  So I’m hoping they say yes.”

Flanked by screens broadcasting an image of his checklist on a Post-it note, the president seemed to mock gridlocked lawmakers. “Every member of Congress should have time to read it and they can glance at it every so often.  And hopefully we’ll just be checking off the list, just like when Michelle gives me a list, I check it off,” he said to laughter from the audience.

The five items on the president’s wish list are all measures he has previously proposed but that have failed to gain traction on Capitol Hill. The list includes eliminating tax incentives to ship jobs overseas and tax credits for clean energy and small businesses.

Obama is also asking for help to create a “Veterans Job Corps” and for lawmakers to act on his latest plan to help homeowners refinance mortgages at lower interest rates.

In the weeks to come, the president said he will continue to urge Congress to act on these measures, which he said “will help accelerate our economy and put people back to work -- not in November, not in next year, but right now.”

While Tuesday’s speech was an official presidential event, Obama managed to sneak in his new “forward” campaign theme.

“We’ve got a long way to go if we’re going to make sure everybody who wants a job can find one and every family can feel that sense of security that was the essence of America’s middle-class experience. But we can’t just go back to the way things used to be.  We’ve got to move forward to an economy where everybody gets a fair shot, everybody is doing their fair share, everybody plays by the same set of rules,” he said.

“That’s what you guys are doing here in Albany.  You’re investing in your future.  You’re not going backwards. You’re going forward,” the president said.

But Senate Republicans Tuesday blasted Obama's "to-do list," saying that it comes 3 1/2 years too late.
 
“Instead of him proposing a to-do list for Congress, we have a to-stop for him,” Sen. John Thune, R-S.D. said Tuesday. “And one is to stop the job-killing regulations that are strangling small businesses in this country, stop making it more expensive and more difficult to create jobs for America's small businesses, stop proposing tax increases on the job creators that are out there, stop blocking the Keystone pipeline that would help move America toward energy independence, and stop this class warfare, which is just destructive to the debate that we have in this country."
 
Thune says Republicans would rather focus on policies that would help the unemployment rate, gas prices and health care costs.
 
“Those are things that we would love to work with this president on when it comes to moving the country forward, rather than his to-do list that is 3 1/2 years too late,” Thune said.

Copyright 2012 ABC News Radio

Wednesday
Apr182012

Congress Unsure Whether to Toss Last Lifeline to Postal Service

Joe Raedle/Getty Images(WASHINGTON) -- Capitol Hill lawmakers only have a few weeks to decide whether to save the nearly bankrupt U.S. Postal Service.

Judging by some comments made Tuesday, the prospects don't look good for the post office as we know it.

There is talk about an $11 billion cash infusion so that the USPS could delay the close of processing centers and underperforming post offices, as well holding off suspending Saturday delivery.

In turn, the USPS would offer buyouts to 100,000 long-time employees, reduce various perks, including future retiree health benefits and raise the price of first-class postage to 50 cents.

Congress has until May 15 to make its decision, the deadline Postmaster General Patrick Donahoe gave before he starts mass closings and a possible end to six-day delivery service.

Sen. John McCain sounded like he was all ready to pull the plug during Tuesday's hearings.

The Arizona Republican said, "Instead of doing as some did when the Pony Express was replaced by the railroads and try to prop up a failing industry, let's find a graceful exit."

Copyright 2012 ABC News Radio

Wednesday
Apr042012

Obama Signs STOCK Act To Ban Insider Trading By Congress

iStockphoto/Thinsktock(WASHINGTON) -- Surrounded by a group of bipartisan lawmakers, President Obama on Wednesday signed the Stop Trading on Congressional Knowledge Act, banning insider trading on Capitol Hill.

“The idea that everybody plays by the same rules is one of our most cherished American values,” the president said at the White House signing ceremony. “It’s the notion that the powerful shouldn’t get to create one set of rules for themselves and another set of rules for everybody else… If we expect that to apply to our biggest corporations and to our most successful citizens, it certainly should apply to our elected officials.”

Any lawmaker who attempts to gain an unfair advantage in the market through the use of nonpublic information will now be breaking the law as a result of the STOCK Act.

While the president lauded the legislation, he made clear “our work isn’t done.”

“There’s obviously more that we can do to close the deficit of trust and limit the corrosive influence of money in politics.  We should limit any elected official from owning stocks in industries that they have the power to impact.  We should make sure people who bundle campaign contributions for Congress can’t lobby Congress, and vice versa,” he said.

Obama thanked the members of Congress who worked together to make the law a reality, saying “it shows that when an idea is right that we can still accomplish something on behalf of the American people and to make our government and our country stronger.”  

Copyright 2012 ABC News Radio

Monday
Apr022012

Gas Efficiency Threatens Highway Trust Fund

Jupiterimages/Thinkstock(WASHINGTON) -- The federal Highway Trust Fund is being hobbled by politics, but it is also threatened by success.

President Obama signed the Surface Transportation Extension Act of 2012 last week, which will ensure 90 more days of cash for the fund.

Democrats and Republicans have been unable to agree on a permanent arrangement for the fund, forcing to live through a series of temporary measures. But long term survival of the fund that finances much of the country's highway bridge work is threatened by the country's success in squeezing more mileage out of a gallon of gas.

The Congressional Budget Office estimates that increased fuel efficiency in cars and trucks will cause the fund, which is 90 percent funded by an excise tax on gasoline, to be running on empty by 2014.

The good news for the fund is that the number of vehicle purchases projected for the next few years is higher than had been anticipated. However, CBO analysts expect any potential revenue gained from an increase in the miles Americans drive in the next few years will "be largely offset by improvements in the fuel economy of vehicles, mainly because of increases in the government's fuel economy standards."

The impact of better fuel efficiency could be quite significant, according to Jesse Toprak, vice president of market intelligence for TrueCar.com.

Average fuel efficiency in new cars sold improved by 1.6 miles per gallon from 21.4 mpg to 23.2 mpg since February of last year, according to TrueCar's analysis.

Toprak assumes that 14 million new cars will be sold per year, each saving 90 gallons of gas per year. That translates into the government losing out on $231.8 million in gas tax revenue per year.

Even less will be collected as cars and trucks comply with federal clean air requirements in coming years.

"If gas efficiency improves dramatically, we're talking 30 miles per gallon on average or better…there is going to be a point where we can safely assume that the consumers in the U.S. will buy less gas for their cars," Toprak said.

"But arguing against gas mileage improvements is like arguing against finding a cure for childhood cancer. Better gas mileage is better for the overall economy…maybe not for this particular fund," he said.

Toprak said it's not just hybrid and more economical cars that are to blame. "It's the overall improvements in every category and every engine class," he said.

The good news, Toprak said, is that car sales are projected to increase in the next few years.

"Increase in new car sales should more than make up for the improvements in gas efficiency…looking at the next three years or so," he said.

The gas tax, 18.4 cents per gallon, has not been changed since 1993 and does not reflect inflation, so the buying power of those 18.4 cents have decreased over the past 19 years. Of course, a move to increase it would be politically unpopular as presidential candidates grapple with this year's early high gas prices.

Congressional Democrats and Republicans now have 90 more days to hammer out legislation that will fund highway and transportation expenditures before the fund runs out of gas.

Copyright 2012 ABC News Radio







ABC News Radio