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Congressman Capuano's
An update from the office of U.S. Representative Michael E. Capuano
8th Congressional District of Massachusetts

12,456 subscribers

December 20, 2011

Dear Friends,

The House spent most of today on symbolic votes that will do little to resolve disagreement over extending the payroll tax cut, unemployment insurance and other measures, which are all expiring in a matter of days.

The House didn’t vote on the Senate measure that passed Saturday with the bipartisan support of 89 Senators. Instead, House Republican leadership scheduled votes on a motion to go conference with the Senate and a motion to instruct conferees. In non-legislative language, the House voted to tell the Senate: “we don’t like your bill; we like our bill better and we will force you to keep negotiating until you agree with us”.

The Senate bill that House leadership is refusing to take up extends the payroll tax cut, unemployment insurance and a host of other items for two months to give Congress more time to work out a longer term solution.

It is far from perfect, and not the bill that I would have written but I concluded that, at this moment it is the only option Congress has to prevent all these measures from expiring. If this bill does come up for a vote, I will vote yes, with great reluctance.

It will be a difficult vote for me, because of how the extensions are funded. Remember, in order to reduce our deficit and balance our budget, Congress is required to offset any increased spending with either tax increases or spending cuts — in Washington, this is called the “pay-for”. This proposal will cost $33 Billion. The Senate is offsetting this cost by increasing fees on people using Fannie Mae, Freddie Mac or Federal Housing Administration loans to buy a home.

This will impact middle class families buying a home — the wealthy and the poor do not use these mortgages. Middle class families will get a two month payroll tax cut, but it will cost more to borrow money for a home. These new home owners would have to pay an additional $20–50 per month under this proposal.

In return for increasing these fees for ten years, employees get a payroll tax deduction for two months, which would mean a total of $170 for the average worker. Unemployment benefits are also extended for two months, as well as Temporary Assistance for Needy Families (TANF).

The bill effectively lowers taxes for the middle class in one area and raises them in another. This is not the approach I would have taken. I prefer to roll back the Bush tax cuts for top wage earners to fund programs we deem necessary.

However, the Senate-passed bill is the only proposal before us — and it is currently the only option we have to prevent taxes from rising on 160 million Americans and ending unemployment insurance for millions more in less than two weeks.

If the House does vote on the Senate proposal, I will vote yes because I believe we need to advance all the positive items in the bill for the benefit of our economy. Although I don’t like the “pay-for” aspects at all, on balance I don’t think that they alone will harm the economy as much as the good portions of the bill will help many people.

The Senate bill has not been taken up by the House and, at this writing, the path forward is unclear. All I can say is that I will continue fighting for investment in our economy and tax equity amongst all Americans. I hope that I will have more to report to you in the days ahead and I wish all of you a happy Holiday season.

Best Regards,

Congressman Mike Capuano
8th District, Massachusetts
Committee on Transportation and Infrastructure
Committee on Financial Services

P.S. I welcome your feedback on our e-Updates. Please let me and my staff know what you think of this service by e-mailing our office.

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