WASHINGTON -- Apparently the deficit hawks flew south for the winter.
At least that's the conclusion that could be drawn from looking at the price tag for the package of bills unveiled early Wednesday morning to keep the government running and extend a bunch of tax breaks, many permanently.
According to estimates by the Joint Committee on Taxation, the cost of the bill extending the tax breaks alone is $621 billion over 10 years, all of which will be added to the deficit.
On top of that, in the omnibus spending bill, Congress is delaying key funding provisions of the Affordable Care Act, which adds another $32 billion in red ink over the next decade. Beyond that, there are a string of tax provisions for renewable energy in the $1.1 trillion bill that would tack on another $25 billion or so in debt. All told, if all measures pass, Congress will be putting nearly $700 billion on the nation's credit card.
"While lawmakers complain about the $18 trillion debt, both sides seem to find new ways to dig the hole deeper," said Steve Ellis, who heads up the thrifty-government-minded nonprofit Taxpayers for Common Sense.
Some cuts didn't make it in, such as ending the estate tax. Of the cuts that made it, here are the largest permanent breaks:
- Boosting the child tax credit to $3,000: $88 billion.
- The American Opportunity education credit: $80 billion
- The earned income tax credit: $30 billion
- Deduction for state and local sales taxes: $42 billion
- The research and development tax credit: $113 billion
- "Section 179" deductions for business expenses: $77 billion
- Active financing income breaks for keeping foreign earnings offshore: $78 billion
The largest temporary break, lasting five years, is a $28 billion giveback for bonus depreciation, a break designed as an economic stimulus that lets businesses write off capital investments immediately.
It's generally considered a stimulus with diminishing impacts because companies soon start claiming if for investments they would have made anyway.
"Bonus depreciation was created to encourage businesses to buy during the Great Recession," Ellis said. "While the economy isn’t great, it’s better, and five years from now when that provision finally expires, it should be a lot better."
Because they have such a mix of breaks embraced by Democrats and Republicans, the bills have a good chance of passing on Thursday.
However, the top Democrat on the House Ways and Means Committee, which has jurisdiction of taxes, sent a letter to colleagues Wednesday urging them to oppose the tax package. Rep. Sander Levin (D-Mich.) argued in the letter that the cuts take too much money from future budgets without having offsetting income to replace it.
Under the bill, businesses would get about 60 percent (about $350 billion) of the cuts, he added, with only 40 percent going to individuals. This ratio should be more balanced, he argued.
He also noted that if Congress permanently cuts federal tax receipts, then it will be harder to achieve tax reform -- a key goal of Speaker Paul Ryan (R-Wis.), who used to chair Ways and Means.
"The American people deserve a more balanced bill that is offset and helps both individuals and businesses in a balanced manner," Levin said.