Back in May, I went on a tear about funding the federal school loan program. The debate in DC was how to fund the program to keep the interest rate from doubling to 6.8; my take was the lender shouldn’t need to fund anything IF they had the cash to lend in the first place.
So now we have passage of the highway project-school loan-national flood program bill, and how did our elected officials determine to pay for this? Well the quote from the CNN story read:
During negotiations this week, legislators decided the revenue to pay the $6 billion cost should come from changes to the way companies fund pension programs.
Uh-huh. Not sure what that means. Digging further produced this tidbit from TheHill.com:
The highway portion of the bill authorizes spending of about $120 billion through 2014, and funds most of that by extending various fuel and highway taxes. But because those taxes don’t fully cover planned spending, the bill raises new revenues from companies by making changes to the way corporate pensions are calculated, and by increasing premiums paid to the Pension Benefit Guaranty Corporation.
The bill would adjust the way interest rates are factored in, and allow companies to contribute less to pensions. However, that would also lead to increased tax revenues from these companies, and this change would raise an estimated $9.4 billion over the next decade.
The second provision would raise the premiums that companies pay to the Pension Benefit Guaranty Corporation (PBGC) to insure their pension plans. This change would raise about $10.5 billion for the government over the next decade.
The additional revenue, plus a new tax on roll-your-own cigarettes, are needed to offset the cost of extending low interest rates for student loans and to make up for a shortfall in gasoline and other taxes that would be extended under the highway legislation.
What sends my brain into spasms, however, is this quote:
However, House Ways and Means Committee Chairman Dave Camp (R-Mich.) welcomed the agreement, and noted that the agreement rejects other tax hikes that the Senate had proposed.
“I am pleased that this bipartisan agreement rejects nearly $7 billion in tax hikes proposed by the Senate and reinforces the fiscally conservative belief that Washington must live within its means,” Camp said.
What????? Since when did “living within its means” include sticking business with the bill, keeping fuel taxes high, creating a new cigarette tax and raising premiums for business insurance programs? Does that mean I can pay for my increased food and fuel costs by decreasing the amount i pay in federal taxes and social security contributions?