Morning Action: Sen. Ted Cruz Talks Defunding Obamacare with Heritage
TAXES. House Ways and Means Committee Chairman Dave Camp plans to move forward on a tax reform bill before the November debt limit debate escalates:
Camp plans to draft legislation in the coming weeks and hopes to have a committee markup in October, the aides said. Assuming Congress agrees to keep the government funded after Sept. 30, Camp’s timeline places a tax reform markup directly between two of the most heated political battles of the year.
The Congressional Budget Office has predicted the U.S. will exhaust its borrowing capacity sometime during November.
Camp, a Michigan Republican, explained his thinking Wednesday during a closed-door bipartisan meeting of Ways and Means members.
Timing on such complicated legislation is always subject to change. Representatives for Camp didn’t comment.
Camp, who is considering a run for the Senate next year, wouldn’t rule out the possibility of linking the completed tax reform bill to the debt limit talks, aides said. Democratic members questioned Camp directly on the issue at today’s meeting, but he could not provide a definitive answer.
Heritage has explained that the debt limit and tax reform are both important but should be considered on their own.
The debt limit and tax reform are both important, but the connection ends there, as it should. Suggestions that some sort of fast-track procedure for tax reform might be the conservative “ask” in exchange for a debt limit increase are way off base.
The debt limit debate is precipitated by ongoing massive deficit spending and the calendar. Tax reform, meanwhile, is precipitated by the need to compensate for President Obama’s economic policies’ failure to launch a robust recovery and to correct a tax system increasingly inconsistent with the dictates of a globally competitive economy.
STUDENT LOANS. The House sent a student loan bill to be signed by President Obama Wednesday following weeks of negotiations between the two chambers (sub. req’d):
Members concurred in the Senate amendment to the bill by a vote of 392-31. The Senate last week advanced the measure as a substitute amendment to the student loan interest rate bill (HR 1911) that the House passed in May.
The bill would modify how interest rates on federal student loans are set, returning to a system that ties interest rates to market rates — but with rates fixed for the period of the loan. The bill would apply to all loans — except for Perkins loans, which are low-interest loans for needy students— issued on or after July 1, 2013.
Specifically, the interest rates would be pegged to the 10-year Treasury note, plus 2.05 percent for subsidized and unsubsidized portions of undergraduate loans, 3.6 percent for graduate loans and 4.6 percent for PLUS loans, which are available to graduate students and parents of undergraduates.
Overall interest rates would be capped at 8.25 percent, 9.5 percent and 10.5 percent, respectively.
INFRASTRUCTURE. Heritage’s Emily Goff explains that President Obama is wrong yet again on government “investments” in infrastructure:
First, every time the government spends, it takes money out of the economy. In this case, Obama wants to tax U.S. businesses as a way to obtain new spending money. It’s easy to point to the new construction project that the government spending has funded. Hidden, but of crucial importance, is the negative effect on the economy from the higher tax burden that’s necessary to pay for that spending. The money didn’t come out of thin air. Government simply transferred resources from the more efficient private sector to the less efficient public sector.
Second, Obama’s repackaged infrastructure spending proposals ignore the recent past—namely, that previous government stimulus did not jump-start the economy. Indeed, if the President’s massive stimulus bill had been the ticket to a stronger economy, perhaps those transportation projects would have been a bit more shovel-ready. Perhaps the private sector would have hired more workers for the long haul and the economy wouldn’t be so sluggish four years into the recovery.
THUD. The House suspended action on its Transportation-HUD spending bill because it lacked sufficient votes. Meanwhile, the Senate still faces a key vote to see whether it can pass its version (sub. req’d):
One day after the House suspended action on its Transportation-HUD spending bill because it didn’t have the votes to pass it, the Senate faces a key vote to see whether it can pass its version over Republican opposition.
Senate Minority Leader Mitch McConnell, R-Ky., is trying to thwart a bid by Susan Collins, R-Maine, to help Democrats win that cloture vote. Six Republicans would have to buck leadership to allow the Senate to proceed to a vote on its bill (S 1243). Senate Democrats seized on the evident collapse of the House bill (HR 2610) to press their call for a larger effort on appropriations.
“The collapse of the partisan transportation and housing bill in the House proves that their sequestration-on-steroids bills are unworkable, and that we are going to need a bipartisan deal to replace sequestration,” said Patty Murray, D-Wash., the chairwoman of the Budget Committee and the Transportation-HUD Appropriations subcommittee. “And while we work toward that, we should pass the bipartisan Senate transportation and housing bill and show our constituents that we are putting them and their communities above partisanship and political games.”
We oppose the Senate THUD bill as it blows through sequestration spending caps and maintains a great deal of wasteful spending.