Two Camels for President Obama?

Our new President is hot on the tail of jump-starting the economy. He has asked our Congress to craft an economic stimulus plan including some strategically placed tax incentives, and to have it on his desk by mid-February. It's called "The American Recovery and Reinvestment Bill" The real question is who will get the bill (Is that Al Franken I hear laughing)?


What will Congress send President Obama?

A camel of course! A Camel by definition is a horse built by a committee. When too many people are involved, what you intended to accomplish becomes so confused and mired, the result is often an odd and unusual creature.

Committees: Our Congress has lots of committees, 435 House Representatives, 99 Senators, and one Comedian waiting to be seated.



If you'll recall your grade school education: Think of the Congressional process like a giant grinder. Bills (tax) are proposed. They are sponsored by particular members of Congress, who advocate them (both in the House of Representatives and Senate). They are discussed, debated, argued, and extolled. If the two branches of Congress can agree separately to pass the bill, a committee then reconciles the two bills into one piece of law, and sends it off for the President's signature. What comes out the bottom of the grinder is often unrecognizable from what went in, kind-of like a piece of sausage.

I can tell you what is supposed to be in the bill, but not what will fall out the bottom of the grinder. Here's what's under discussion right now.

A $500 tax credit for working singles, $1,000 for working married couples, and a $300 credit for retired Seniors and the disabled. Is it a rebate like last year? No, right now it's a credit that will allegedly be passed on to you via immediate lower withholding. Oh wait! There is word that this will be as a payroll tax cut, not an income tax cut. Huh?

A $2,500 higher education credit. A $7,500 non-repayable tax credit for first-time home buyers (for houses bought until July 1).

Senator Grassley has proposed an increase in the rate of the standard mileage rate for charitable work. It has been stuck at 14 cents a mile since 1984. I'm not sure how this helps the economy. Maybe they think people wealthy people will buy more cars, so the can drive them around and get more deductions? Were you wondering? Yes Grassley is a Republican.

A Separate act called "The FREEDOM Act of 2009" (as in energy freedom) has tax credits for plug in electric vehicles and plug in conversions. Right now you can get your Prius converted to plug in if you live in San Francisco, elsewhere good luck. Factory Plug-in vehicle from auto makers are only pretty Autoshow cars at this point and not yet available for sale.

Tax increases? Thursday the Senate passed a 65 billion dollar 10 year increase in Tobacco taxes to fund State Children's Health Insurance Programs.

Stay tuned for more.