H.R. 4213, The ‘Extenders’ Bill: An Update

More Taxes, More Spending, And More Debt

After a widespread backlash over its extravagant price tag, Democrats have created an illusion that their tax “extenders” bill costs less than earlier this week. In reality, however, they have made some provisions more generous, but simply shortened the “official” duration of the spending, while further increasing taxes. In the end, their sleight-of-hand fails to mask the truth: the measure remains a bloated replay of the “stimulus” doctrine that has failed to deliver on its promised job creation.

The legislation, scheduled for the House floor this week, was a $31-billion package when originally passed in the House (on 9 December 2009). It grew to $95 billion by the time it passed the Senate (on 10 March 2010); and by earlier this week, it had swollen into a $174-billion package. Recent modifications brought the official figure down to $127 billion, still a fourfold increase from where it started. Here are some key budget facts about the revised American Workers, State, and Business Relief Act of 2010 (H.R. 4213):

  • It increases net spending by $127 billion over 10 years, bringing total spending increases since January 2009 to $1.9 trillion.

  • It increases net taxes by $43 billion (a $3-billion increase over the prior version), bringing total tax increases since January 2009 to $713 billion.

  • It increases the deficit by $84 billion over 10 years.

  • It extends at least 10 “temporary” provisions from the 2009 “stimulus” bill.

  • It double-counts $11.8 billion in increased taxes for the Oil Spill Liability Trust Fund to cover the cost of the Gulf Coast cleanup and to offset unrelated spending in the bill.

  • It adds $44.5 billion to the cost of the recently enacted health care law, with the requirement of more spending to come.

The final bill continues temporarily extending a handful of tax relief provisions that expired at the end of 2009, while permanently increasing other taxes. But the revised measure increases net taxes by an additional $3 billion compared to the version earlier this week, resulting in an even higher overall permanent tax burden than before. It also pretends to save money by shortening, by 1 month, the extension of the “stimulus” bill’s “one-time” unemployment insurance and health insurance benefits, while leaving the extension of Medicaid assistance to States at its earlier levels. The updated package similarly reduces the length of the temporary “doc fix,” to prevent cuts in Medicare physician payments, thereby reducing the bill’s official cost by $40 billion. Meanwhile, the funding for the wide variety of miscellaneous provisions – ranging from changes in the highway spending formulas, pension relief for corporations, subsidies for local bonds for infrastructure projects, and even funding for the Wool Trust Fund – remain the same.

Read the full report here.