House panel votes to make $412B in tax breaks permanent

Updated at: 09/17/2015 2:53 PM

(AP) WASHINGTON - WASHINGTON (AP) — House Republicans advanced legislation Thursday to make permanent a series of temporary tax breaks for restaurants, multinational corporations and other businesses.

One would make permanent a $250 deduction for teachers who spend their own money on classroom supplies.

The bills would add a total of $412 billion to the budget deficit over the next decade, drawing complaints from Democrats who said Republicans are willing to rack up debt to pay for tax cuts, but not to pay for important programs.

"Anybody who talks about caring about debt and then votes for these bills is hypocritical to the Nth degree," said Rep. Jim McDermott, D-Wash.

Republicans countered that the tax breaks, which expired in January, are longstanding provisions that are routinely renewed every year or two — with support from both Republicans and Democrats. Making them permanent would add certainty to the tax code while being honest about the long-term cost, said Rep. Kevin Brady, R-Texas.

"These are longstanding provisions in the tax code and Democrats are hypocritical when they regularly vote to extend them for a year or two, but believing there is only a cost if you extend them permanently," Brady said.

Congress routinely lets more than 50 temporary tax breaks for businesses and individuals expire, only to renew them at the end of the year so taxpayers can claim them on their tax returns. The tax breaks most recently expired in January.

The House Ways and Means Committee has been working to make selected tax breaks permanent. The White House and many congressional Democrats oppose the effort because it adds to the budget deficit.

"Instead of giving away hundreds of billions of dollars of corporate tax cuts, Republicans should actually do their most basic job first and foremost, and that's fund the government at levels that are consistent with our economic and national security priorities," said White House spokesman Josh Earnest.

Republicans note that extending the tax breaks every year or two adds the same amount to the budget deficit. But under Congress' budget rules, the full cost of temporary tax breaks doesn't show up in official deficit projections.

"We don't believe that to keep taxes where they are for these hardworking Americans, we ought to go raise taxes on other Americans," said Rep. Paul Ryan, R-Wisc., chairman of the House Ways and Means Committee.

Ryan's committee passed a total of seven bills, sending them to the full House. Two would make small changes to President Barack Obama's health law.

One would expand the religious exemption from penalties for not getting health insurance. Aimed primarily at people who practice Christian Science, the bill would exempt people who rely solely on a religious method of healing.

The other would allow people to use tax-free health savings accounts to buy over-the-counter medication.

The five tax bills were all passed on party line votes, with Republicans in favor and Democrats opposed.

—Two would enable businesses to more quickly write off the cost of buying new equipment and renovating property. One bill targets restaurants and retailers; the other is broader.

Together, they would add $309 billion to the budget deficit over the next decade, according to the nonpartisan Joint Committee on Taxation, which provides official estimates for Congress.

—Two would benefit U.S.-based multinational corporations. One bill would exempt from taxation certain foreign profits by financial firms, including banks and securities dealers. The other bill would exempt certain payments among related foreign subsidiaries.

Together, they would add $100 billion to the budget deficit over the next decade.

— The bill providing a $250 deduction to teachers would add $2.5 billion to the budget deficit over the next decade.


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