A large job and tax bill that is appearing before the Senate this week will add up to $134 billion to the federal deficit as written, according to estimates from the Congressional Budget Office and the staff of the Joint Committee on Taxation. The bill attempts to simultaneously support job growth, aid out-of-work Americans and provide funding for emergency disaster relief.
The bill, entitled the American Jobs and Closing Tax Loopholes Act, would increase government spending by $174 billion while raising $40 billion in additional tax revenue. The $134 billion difference would be absorbed by the federal deficit.
The legislation aims to create jobs by offering temporary funding relief to single and multi-employer pension plans, providing tax cuts for small businesses and supporting infrastructure investment.
Additionally, the bill aims to provide safety nets to the unemployed, extending unemployment compensation programs through December and continuing the Federal Additional Compensation program, which increases all unemployment benefits by $25 a week. It also stipulates that the federal subsidy that pays for health coverage for the newly unemployed through COBRA should be extended through the year’s end.
According to BusinessWeek.com, in total, the bill promises $55 billion to extend unemployment benefits, $24 billion to aid state governments to eliminate budget cuts and $63 billion to delay cuts to Medicare reimbursements to doctors.
The revenue generated by the bill would come from tax increases on the “carried interest” paid out to hedge fund managers of private equity firms and other investment pools. The bill would also change the way that corporations receive foreign tax credits and income.
The bill is expected to be heard by the Senate this week, with a vote possibly coming before the holiday weekend. It’s expected to face opposition from both parties due to its heavy price tag.