Pressing the Accelerator As We Drive Down the Road To Ruin

Lawmakers may extend the stimulus

A disparate collection of lawmakers and special interests is pushing to extend tax credits and other benefits — effectively proposing another economic stimulus with a price tag of at least $88 billion.

Their wish list applies to measures in February’s $787 billion stimulus that were passed to provide a temporary jolt to the economy.

Nearly six months later, these measures have developed entrenched constituencies, and members of both parties are pressing to retain favored priorities.

Republican lawmakers have joined some Democrats and business groups like the National Association of Manufacturers in calling for an extension of a tax break expiring at the end of the year that allows businesses to write off losses. That “carryback” provision cost $15 billion in the February stimulus.

Sens. Max Baucus (D-Mont.) and Olympia Snowe (R-Maine) and Rep. Patrick Tiberi (R-Ohio) are pushing legislation to keep that business tax break alive. Tiberi also wants to extend separate expiring tax credits for first-time homeowners and car buyers that cost a combined $8.3 billion.

On the homeowners tax credit, he’ll benefit from the August lobbying campaign planned by the National Association of Realtors. The group wants to extend into 2010 the $8,000 tax credit for new homebuyers, set to expire at the end of November, and also to expand it to all homebuyers.

Several other tax breaks for business are set to expire by the end of the year, including measures that allow small businesses to deduct the cost of capital equipment and write off up to $250,000 in depreciable property, and for senior citizens to access 50 percent more in loans through reverse mortgages.

In total, the separate drives would extend about $88 billion in provisions from the earlier stimulus, though they may not end up in a combined package.