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On The "Simple" Extension Of The 2% Reduction In Payroll Taxes

 February 20, 2012 02:33 PM

This week our leaders in D.C. extended the payroll tax deduction for another ten months. The new law also extends Unemployment Benefits, and it allows for a continuation of the old payouts to Doctors for Medicare reimbursements. The cost of the legislation is $110b for the rest of the year. There are some minor offsets to this expense in out years. (We will never see those offsets.)

This legislation should have been easy to draft because it is was just an extension of what had been agreed to, two months ago. But that's not the case. H.R. 3630 is 386 pages long. The Bill includes some interesting things:

*The Keystone Pipe line is a "go":

The President, acting through the Secretary of State, shall grant a permit relating to issuance of permits with respect to certain energy-related facilities and land transportation crossings on the international boundaries of the United States for the Keystone XL pipeline project.

There is still "wiggle room" on the pipeline. Obama can nix the deal, but he has to do it over the next 60 days, and he has a tough obstacle:

The President shall not be required to grant the permit if the President determines that the Keystone XL pipeline would not serve the national interest.

Obama cannot make a strong argument that the Keystone XL pipeline is not in the national interest. And he knows it. Therefore, I conclude the pipeline will happen. The president folded on this one. Environmentalists will be unhappy.

*There is a new provision for eligibility for unemployment benefits. In the future, some states will require you to pee in a cup:

(A) Testing an applicant for unemployment compensation for the unlawful use of controlled sub- stances as a condition for receiving such compensation.

(B) Denying such compensation to such applicant on the basis of the result of such testing.

(C) The term ‘controlled substance' has the meaning given such term in section 102 of the Controlled Substances Act (21 U.S.C. 802).

In case you were wondering, marijuana is a controlled substance under U.S.C 802. Something like this might reduce those seeking UE benefits by 30-40%......

*There is regulatory relief from the EPA on environmental standards set for boilers. The bottom line is that they can continue to burn dirty fuel. More pissed off environmentalists.

*The Bill calls for a one-year extension of the 100% "Bonus" tax depreciation allowance. The Congressional Budget Office (CBO) set the price tag for this at $28 billion. This is a gift to American companies.

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