The House worked late into the night, meandering through its schedule. They began their day by debating but then postponing a roll call vote on the first of the six scheduled suspension bills, then passing the next three by voice vote. Then, taking a detour, they returned to consideration of the "EPA Regulatory Relief Act" left over from last week, debated eight amendments to it but postponed the votes on them, then veered off and passed the rule for consideration of the trade bills. Then they turned back around and voted on the postponed amendments to the EPA bill (defeating them all), but still not passing the bill. Instead, they returned to the remaining suspension bills, passing them both by voice vote, before beginning debate on the trade bills, leaving the EPA bill hanging until later. Very strange, though not by any means out of keeping with the rules.
The Senate approached their schedule in a more straightforward manner, confirming the nomination of Jane Margaret Triche-Milazzo to the bench in the Eastern District of Louisiana by a vote of 98-0, and passing the Currency Exchange Rate Oversight Reform Act, 63-35. But the Senate was still the Senate, voting down cloture on the motion to proceed to the American Jobs Act by a vote of 50-49.
Speaking of which, have you all seen this 90 Second Summary of the AJA, from Main Street Insider (which also maintains a group page at Daily Kos)?
Looking ahead to today:
Today, the House mops up much of yesterday's work, with plans to complete consideration of the four trade bills (three free trade pacts and an extension of the Generalized System of Preferences), continue work on the EPA bill, and then get back to that one postponed suspension bill.
The Senate plans a 12 hour marathon debate on all three pending free trade pact implementation acts (implementation acts are the vehicles by which treaties are enacted into U.S. law). Of course, with the House still working on the bills today, I'm not sure by what reasoning the Senate will be claiming to be in possession of the papers (remember that?) they'll supposedly be debating. Maybe there's something special about treaty implementation acts that makes it possible to do that. But this Senate Dems blog entry suggests it's just the magic of unanimous consent, but that the votes can't actually happen until the papers arrive from the House.
Today's floor and committee schedules appear below the fold.
On Tuesday, the Senate Finance committee held a hearing on tax reform during which Dr. Leonard E. Burman offered an interesting response to the oft-cited connection between hiring and tax rates. He argued that since labor costs are tax-deductible, employers benefit so long as a worker produces as much as the costs of hiring him or her. Demand, he added, is the far more significant factor in a business' hiring decisions and the more serious problem as of late.
This week, President Obama proposed paying for the American Jobs Act with tax increases on the very wealthy, or as the Heritage Foundation puts it: "tax hikes on job creators." This is typical of conservative messaging, dubiously framing all people who earn more than $200 thousand per year as "job creators," and repeating the unsubstantiated claim that moderate tax increases on the wealthy cause businesses to hire fewer workers. The Heritage Foundation cites themselves as the source to backup this claim.
As Dr. Burman argued, US businesses are far less responsive to tax rates than many would have us believe. The non-partisan Congressional Budget Office notes that "increasing the after-tax income of businesses typically does not create much incentive for them to hire more workers in order to produce more, because production depends principally on their ability to sell their products."
The fundamental point about how raising taxes on small businesses would affect hiring is an important one, but the important thing is that labor costs are deductible. So, if a worker can produce as much as it costs to hire him or her, it's worth doing because after tax they would still make money. The big problem small businesses have right now is that there's not demand, it's not the tax regimen. Now, it could have some affect on investment over the long term, but I think all of those affects are, when I read what Mr. Entin writes, I have this feeling that if you believe this you would think that you had to have an absolutely perfect tax system to have the economy grow at all. And if that were the case, we'd be in really big trouble. I think that the fact is that we're much less responsive to tax rates than you might think from these theoretical models.