On July 23, the Senate approved legislation (H.R. 4213) extending federal unemployment benefits for workers that have exhausted their normal six months of benefits through November 30. The extension is retroactive to June 2. The House passed the measure one day later on June 24. The President is expected to sign the bill.
The bill, as originally adopted by the House in May, would have extended through 2010 a number of expired tax provisions. However, the Senate was unable to advance the larger tax extenders package due to concerns from both Democratic and Republican Senators over the impact the cost of extending these provisions would have on the federal deficit.
The cost of the measure was estimated at $113 billion over 10 years and the cost would have only been partially offset. Moderate Senate Democrats and Republicans have insisted that the cost of renewing any expiring tax cuts or new tax cuts be offset by new revenue generating provisions.
Tax provisions stripped out of the bill included an extension of the Energy Star tax credit. The tax credit provides $1,000 to manufacturers of Energy Star-rated manufactured homes and $2,000 to manufacturers of Energy Star qualified modular homes.
Failure to pass legislation extending tax cuts adopted in 2001 and 2003—scheduled to expire at the end of 2010—would also raise the maximum rate on long-term capital gains to 20 percent, which would impact those receiving carried interest. The underlying bill would have also revised the treatment of carried interest.
Eventually, the Senate stripped out the tax provisions in order to pass a scaled-down version of the bill that only contained an extension of unemployment benefits.
The Senate Finance Committee is expected to consider a revised tax extender prior to leaving for the month-long August recess.
For more information, contact MHI Vice President of Government Affairs Jason Boehlert at 703-558-0660 or firstname.lastname@example.org.