This week, the Senate may consider the SECURE Act. This legislation passed the House in May. The act makes changes to rules governing tax-free retirement accounts like IRAs and 401 (K)s. The bill originally contained a provision allowing homeschooling families to use 529 tax-free savings accounts for homeschooling expenses, but speaker Nancy Pelosi removed it at the “request” of the teachers unions—who just happen to be the largest financial supporters of the Democratic party.
There is an effort led by Senator Ted Cruz to add the 529 provision to the Senate version of the bill. Supporters of this effort are looking for statements from homeschooling parents explaining why allowing them to use money saved in tax-free savings accounts would benefit them. If your family would benefit from being able to use Section 529 to benefit your children, call your Senators and tell them to support Senator Cruz’s efforts to amend the SECURE act to make 529s available to homeschoolers.
For more on Section 529 see here.
Unfortunately, SECURE also raises taxes on Americans and increases the value of IRAs. Under current laws, an IRA can be passed down to one’s heirs. But the house-passed SECURE Act changes the law to require heirs of an IRA holder to empty the fund within 10 years, so the amounts in the fund can be taxed. This is to “pay for” the revenue loss caused by the other changes in the bill. It would be nice if Congress paid for tax cuts with spending cuts or was as concerned about increasing the deficit when they were discussing increasing spending. . .
. . . which brings us to the big event of the week: a budget deal lifting the 2011 spending caps for both defense and non-defense spending and extending the debt ceiling past the 2020 election.
We are repeatedly told that extending the debt ceiling is important to keep America from defaulting—but what credit card company would continue to increase the credit limit of a chronic deadbeat? Yet those of us who oppose raising the debt ceiling—or at least want to see the debt ceiling increase tied to spending cuts right now so we never have to go through this again—are the ones being “reckless” with our country’s future.
Speaking of reckless spending, last week the administration announced that the deficit will reach $1 trillion this year. The federal deficit has never reached that level at a time when the economy was not in an (officially recognized) recession. Yet there is no serious attempt to cut spending. And those who try to cut spending are attacked and smeared.
For example, last week Senator Rand Paul (along with Senator Mike Lee) objected to a unanimous consent attempt to bring up legislation extending the 9-11 first responders trust fund. Under unanimous consent, there is no debate or amendment process.
The bill extends the program until 2090 and places no limits on payments.
Senator Paul was not objecting to the program, he was objecting to the fact that the program was not “offset.” Senator Paul was not objecting to the spending—even though the program will likely cost $10.2 billion over the next ten years alone. Instead, Senator Paul had the bizarre idea that the federal government should actually pay for new programs by cutting old ones.
Senator Paul was roundly criticized for his stance, most notably by former Daily Show host John Stewart, for his position. But he did get a vote on offsetting the costs, which will occur this week.
Here is a good defense of Senator Paul’s position.
Here is Senator Paul defending himself on Fox News.
Here is a great interview with Reagan’s former OMB director David Stockman on the debt.
The House Republican Study Committee has adopted a resolution opposing any two-year spending deal that breaks the budget caps unless the increase in spending is fully offset, enacts long-term spending restraints, and does not “irresponsibly” increase the size of the federal budget.
For more information on the RSC’s efforts, see here.
The House will also consider H.R. 397. This bill creates a new bureaucracy—the Pension Rehabilitation Administration—to administer a new trust fund created to make loans to pension plans that are in critical condition, including plans that have been declared insolvent or have suspended benefits.
The trust fund will be funded by Treasury bonds, and any plan that receives a loan can still apply for money from the Pension Guaranty Corporation if the plan still needs help. The bill also authorizes appropriations of “such sums” as necessary for the PGBC to pay the amounts given to recipients of loans that forms the new trust fund.
The House will also consider H.R. 3239, which establishes new standards for treatments of illegal immigrants detained at the border.
The House will also consider H.R. 2203, which creates a commission to investigate treatment of immigrant families. It also creates an Office for Border Community Liaisons, Training and Management.