Weekend Economists Celebrate the Season! December 18-20, 2015

[Proserpina]

4. US House approves $622B tax plan

http://thehill.com/policy/finance/263590-house-approves-622b-tax-package

The House on Thursday passed a sweeping $622 billion tax package, the first of two massive end-of-year measures Congress is rushing to conclude this week.

The “tax extenders” bill was approved in a 318-109 vote, with 241 Republicans joining 77 Democrats in backing the measure.

Only 3 Republicans (Reps. Justin Amash (Mich.), Chris Collins (N.Y.) and Walter Jones (N.C.)) voted against the bill, which permanently renews a range of tax provisions following years of short-term extensions while extending other tax breaks through 2016 or 2019.

The House is expected to vote Friday on a $1.1 trillion omnibus spending measure that would fund the government through September 2016.

House Republicans were expected to provide the lion’s share of votes on Thursday, while Democrats may provide more than half of the votes for the omnibus on Friday. But House Minority Leader Nancy Pelosi (D-Calif.) said Thursday that she is not confident there are enough Democratic votes to push the omnibus over the finish line at this point, although though she herself will support the bill...Of the two year-end bills, the tax measure is more controversial with Democrats, with many fearing it will increase pressure to reduce spending by raising the deficit. The measure makes permanent several business tax breaks such as the research and development tax credit and enhanced small business expensing under section 179 of the tax code...Tax breaks that would be cemented include the expansions of the earned income tax credit, the child tax credit and the American opportunity tax credit, which were all created under President Obama's stimulus law...and includes a two-year freeze of ObamaCare's medical-device tax...A separate ObamaCare change freezing the "Cadillac" tax on high-cost insurance plans is included in the omnibus package...

but did they reduce spending to pay for these cuts?