The Tax Foundation on Friday launched a Web-based "Bush tax cuts" calculator that computes the increase taxpayers might incur if the tax breaks enacted by President George W. Bush were to expire, which is scheduled to occur next year.

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After a lengthy debate Thursday, the Senate voted 60-37 to end debate on an amendment for community bank lending.

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Sen. George LeMieux (R-Fla.) reiterated his support for the $30 billion small business lending fund under consideration in the Senate.

"I believe it will help and that's why I support it," he said Thursday night on the floor. 

LeMieux said the bill isn't about large Wall Street firms but instead about local banks lending to small businesses. 

"This won't increase the deficit and it will return more than $1 billion to the Treasury over time," LeMieux said. "It's not a deficit it's a surplus."

With an unemployment rate of 11.4 percent, Florida is in need of a bill that can help create jobs, he said. 

"The bill doesn't create big government, it puts the money in the hands of community bankers to lend to small business, the folks that create jobs," he said. 

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The Senate Finance Committee met on Thursday in what appeared to be the beginning stage of discussions on the fate of tax policy. 

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"It was more exploratory to try and figure out what's the best policy for our country," said Senate Finance Chairman Max Baucus (D-Mont.) after the meeting concluded. 

Committee members from both parties met to discuss a broad ranges of tax issues, such as energy and reform, but talks seemed to focus on what to do about the tax cuts enacted by President George W. Bush that are slated to expire at the end of the year. 

How to handle the Bush tax cuts is a complicated question. The sluggish economic recovery has more than a few senators pressing to extend all of them, but doing so would cost more than $1 trillion and probably would add to the deficit.

"We're going to have to dig down and try to figure out a way to answer the big questions, namely what about the '01, '03 cuts in rates, what about the deficit, and AMT and so forth," Baucus said.

Members did not make a decision about marking up the Bush tax cuts before the August break.

"We raised that question," he said. "There's no strong feeling about any of those things." 

Committee member John Cornyn (R-Texas) said there was talk of marking up a bill in September. 

"My impression was they are talking September in terms of markup," he told reporters. 

Cornyn said that talks covered a number of tax matters, like the alternative minimum tax, energy, tax reform, and the Bush tax cuts. He also said there was some discussion about whether some of those issues could be combined. 

"The issue is whether to go small or go big and what can be done in the limited timeframe that we have," he said, adding. "We're dealing with the 2001, 2003 tax provisions, or are we talking about other things like energy or are we talking about a whole laundry list of tax [issues] like reform."

 

 

House Financial Services Chairman Barney Frank (D-Mass.) took the long, winding, possibly yellow brick road to explain.

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Sen. Mary Landrieu (D-La.) blasted her Republican colleagues over their opposition to a $30 billion small-business lending fund. 

The fund, which has the broad support of community bankers, has been called a bailout by those who don’t support the proposal. 

“This is for community banks,” she said Thursday. “Because they want a bumper sticker to run on in this election they’re going to throw small businesses under the bus … over my dead body. “

Landrieu insisted that the lending funding isn’t a government program and that instead it’s an avenue to get money to Main Street. 

“I feel like I’m in Alice in Wonderland,” she said. 

The $30 billion fund could be leveraged to provide as much as $300 billion of credit, according to the Independent Community Bankers Association.

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Federal Reserve Chairman Ben Bernanke said extending the tax cuts enacted during President George W. Bush's administration could provide a boost to the economy. 

Bernanke said while the tax cuts would help, lawmakers need to find a way to offset them. 

"In the short-term, I would believe that we ought to maintain a reasonable degree of fiscal support, stimulus for the economy. There are many ways to do that. This is one way," Bernanke told the House Financial Services Committee on Thursday. "There are other ways as well."

"In the longer term, I think we need to be taking steps to reassure the American people and the markets that our fiscal situation is going to be well-controlled."

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The battle over deficit spending got heated on the House floor Thursday as lawmakers voted to extend unemployment benefits for six more months. 

The House voted 272-152 to pass a $34 billion six-month extension of unemployment benefits, retroactive back to the June 2 expiration. 

After a war of words on the floor, 31 Republicans supported the bill and 10 Democrats opposed the measure. 

Republicans and Democrats were free-flowing with their comments, blaming the other party for the recession and the lack of a faster economic recovery. 

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Unless Democratic leaders allow more for more amendments on the small business jobs bill, Sen. George LeMieux (R-Fla.) could withhold his support for cloture on the legislation even though he plans to support an amendment creating a $30 billion lending pool and final passage of the bill.

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