A Weekly e-Newsletter From Senator Johnny Isakson (R-GA)
October 30, 2009
Over the last week I have worked with Senate leadership to craft a compromise amendment to extend and expand the current first-time home buyer tax credit, which is set to expire on November 30, 2009. This amendment would include buyers in the "trade-in" or "move-up" market, because I believe the real housing recession is in this market in which citizens are putting off purchasing their next home. The amendment would continue the $8,000 tax credit for first-time home buyers and would establish a new $6,500 tax credit for "move-up" buyers so long as the home they are leaving has been used as their principal residence for five years or more.
The amendment is expected to be attached to legislation currently on the floor of the Senate that extends unemployment benefits. However, a vote has not yet been scheduled for the amendment.
Both the $8,000 first-time home buyer credit as well as the $6,500 credit for "move-up" buyers would sunset on April 30, 2010. However, individuals with contracts as of April 30, 2010, would still qualify for the credit so long as they complete the transaction within 60 days. The amendment establishes income limits of $125,000 for an individual or $225,000 for a couple for both credits. The cost of the home may not exceed $800,000 in order to be eligible for the credit.
For purchases made in 2010, taxpayers would be able to claim the credit on their 2009 income tax return. Home buyers would not have to repay the credit, provided the home remains their principal residence for 36 months after the purchase date. However, the recapture provision would not apply in the case of a member of the Armed Forces, military intelligence or Foreign Service who is on qualified official extended duty. In addition, members of the military who have been deployed overseas for 90 days or more in 2008 or 2009 would have until April 30, 2011, to claim the home buyer tax credit.
The amendment also includes anti-fraud language that provides math authority to the IRS to do greater oversight during the processing of the return rather than waiting for an audit situation. The amendment requires the taxpayer claiming the credit to be 18 or older as well as requiring a HUD-1 settlement statement to be attached when claiming the credit.
I am extremely hopeful that the tax credit will pass, because I believe it will swiftly help our economy get back on track. It is an ideal way to stimulate the economy as it will allow taxpayers who take advantage of the credit to keep more of their own money, which they can spend as they see fit. However, I believe this should be the last extension of the home buyer tax credit. Tax credits such as this are only effective if there is a sense of urgency to take advantage of them immediately and to bring the market back.
Health Care Reform
Democratic leadership in the U.S. House of Representatives unveiled a new health care bill on Thursday morning. While the bill in not yet finalized, it is already over 2,000 pages and likely would cost more than $1 trillion. It would expand Medicaid to 150 percent of the federal poverty level, which would be covered by the federal government for the first year of implementation in 2014 but with states paying 9 percent of the increased cost after that.
I remain firmly opposed to any bill that would put the federal government in an unfair competition with private health insurers and managed care providers and that would place a massive financial burden on Georgia and other states to pay for a proposed expansion of Medicaid.
It seems the legislation would also require companies with a payroll of $500,000 or more to offer health coverage to employees, or pay a penalty of at least 2 percent of payroll. The penalty gradually rises, and firms with payroll greater than $750,000 would pay a penalty of 8 percent of payroll. The so-called public option in the new compromise would have the federal government negotiating rates with providers similar to the way private insurers do, rather than dictating what the plan can pay hospitals, doctors and other providers. Instead, the federal government would have to negotiate rates with providers, much as private insurers do.
In addition, the cost will likely exceed $1 trillion because this version does not include the cost of fixing the Medicare reimbursement rate. I certainly support a Medicare reimbursement system fix and believe that it should be permanent. It also does not include the cost of protecting seniors from a gap in coverage for prescription drugs.
In the Senate, Democratic Leader Harry Reid (D-Nev.) is working with the White House and a small group of Democrats behind closed doors to merge the Senate Finance Committee's health care reform legislation with the bill that was passed in July by the HELP Committee. Reid sent a massive package of reform proposals to the Congressional Budget Office earlier this week for the office to determine the costs. I joined with a number of Senate Republicans in calling on Reid to release the entire version of the health care reform bill he sent to the CBO for review, because we feel that the public and members of Congress should be allowed to evaluate it while CBO scores its costs. Senator Reid has said this is still not the final bill, but when the final bill is settled upon that it will be brought to the floor for debate. Currently, no one knows what this new hybrid bill might look like or when it will be considered.
I feel that the key to health care reform is stimulating competition in a market-based system that will encourage private health insurers and managed care providers to compete for business and make health insurance more affordable for consumers. I believe there could be some common ground between Republicans and Democrats in terms of insurance portability and not being rejected for pre-existing conditions or cancelled if you have a disease. However, I firmly believe the best way to reach these goals is through choice competition in the private sector.
I am committed as a co-sponsor of S.1099, Patients' Choice Act of 2009, which seeks to strengthen the relationship between the patient and the doctor by using choice and competition, rather than rationing and restrictions, to contain costs and ensure affordable health care for all Americans.
Legislation to Increase Transparency in Legislative Process
On Monday, I joined 26 senators in co-sponsoring legislation to push for a Senate rule change that would make the text and cost of all legislation publicly available on the Internet at least 72 hours before senators debate or vote on the proposals.
S.1772 would change the rules of the Senate to require that the text of all legislative matters be posted on the Internet 72 hours in advance of being debated or voted on by the full Senate or by any subcommittee or committee of the Senate. In addition, S.1772 requires that the cost of legislation be available 72 hours in advance in the form of a full score by the Congressional Budget Office.
We must take the time to establish transparency in the legislative process. This legislation will help ensure that members of Congress as well as the general public have the opportunity to thoroughly review legislation before it is considered as well as find out what it will cost American taxpayers.
Georgia Business Summit
On Friday, November 6, Governor Sonny Perdue will host a business summit on at the Georgia World Congress Center from 1 p.m. to 4:30 p.m. Attendees at the summit will discuss federal health care and energy proposals that will impact both large and small Georgia businesses. For more information or to RSVP, contact firstname.lastname@example.org.
Cap-and-Trade and the Copenhagen Treaty
I believe it is in the geopolitical and environmental interests of the United States to reduce our dependence on imported foreign oil. Such a reduction is possible through the development of all our domestic sources of energy, including nuclear, wind, biomass and biofuels, solar, hydro, geothermal, and exploration of oil off U.S. shores.
I remain concerned that some in Congress and the administration are rushing to judgment on a cap-and-trade system to regulate carbon. Johnny believes cap-and-trade will raise the cost of energy to all Georgians, especially those who rely on electric energy. Such a program will tax carbon and redistribute the proceeds from that tax toward other programs unrelated to energy. We need incentives to reduce carbon, not taxes to punish its production.
I strongly oppose the Waxman-Markey climate change bill that passed the House on June 26, 2009. The Senate is not expected to consider the Waxman-Markey bill. Senate Environment and Public Works Committee Chairwoman Barbara Boxer has introduced a climate change bill, but it is only one of several proposals expected in the Senate and there is no timetable for debating any of them. I will work to ensure that the Senate does not pass a bill that would raise the cost of energy to all Georgians or negatively impact the American economy.
In December, the United Nations will host the annual United Nations Framework Convention on Climate Change in Copenhagen, Denmark. It is highly unlikely that Congress will have passed climate change legislation by that time. Carol Browner, President Obama's point-person on energy and climate change issues, has said publicly that she does not plan to attend the conference if legislation is still being considered by Congress. In addition, the President may not sign any international treaty without a two-thirds approval of the U.S. Senate.
Walter Reed Army Medical Center
Today I went to Walter Reed Army Medical Center in Washington to visit with wounded Georgia soldiers. Although I go to Walter Reed periodically to visit injured U.S. troops who are recuperating after receiving medical treatments, I make it a point to ensure that our Georgia troops and their families have my contact information and know they have an advocate here in Washington while they are at Walter Reed.
We cannot forget the sacrifices these loyal men and women have made to protect our freedoms and ensure our way of life. The people of the United States owe our soldiers and veterans a great deal, and I am committed to making sure that the promises that our government has made to these men and women will be honored.
What's on Tap?
Next week, the Senate likely will resume consideration of the unemployment insurance extension bill (HR 3548) with my extension and expansion of the homebuyer tax credit. Later in the week, the Senate is expected to take up its version of the Military Construction-VA spending bill (HR 3082) that would provide $133.9 billion in fiscal 2010 funding for the Department of Veterans Affairs, military construction and military housing. The Senate may also return to the fiscal 2010 Commerce-Justice-Science appropriations bill (HR 2847).