Welcome to The Taxpayer's Tab -- the weekly newsletter for up-to-the-minute research from the National Taxpayers Union Foundation's BillTally project. For more information, check out NTUF's BillTally project and our partner, WashingtonWatch.com! Most Expensive Bill of the WeekThe Bill: H.R. 3865, College Tax Cut Extension Act of 2012 Annualized Cost: $6.1 billion ($18.4 billion over three years) In 2010, the amount of student loan debt outstanding surpassed the amount of debt that Americans owed to credit card companies. Since then, the amount of student loan debt has continued to rise and now exceeds $1 trillion according to the federal government's Consumer Financial Protection Bureau. While the White House and Congress argue over how to keep interest rates on student loans from doubling once a temporary rate reduction expires, Congressman Bruce Braley (D-IA) has introduced legislation to lower the cost of attending college and thereby reduce the amount of debt that a student will graduate with. H.R. 3865, the College Tax Cut Extension Act of 2012, would extend the American Opportunity Tax Credit until 2016. The credit allows a student to claim a tax credit of up to $2,500 for the first $4,000 of qualified undergraduate expenses, which include tuition, fees, and certain course materials. Up to 40 percent, or $1,000, of the credit is refundable. Refunds in excess of a taxpayer's liability are counted as spending by the Congressional Budget Office (CBO). Based on data from the President's FY 2013 budget, NTUF estimates that H.R. 3865 would increase spending by $18.4 billion over the FY 2014 to FY 2016 period. Note: The Most Friended Bill of the Week, H.R. 3826 (and its companion, S. 2051), addresses the increase in student loan interest rates. To learn more or discuss this bill visit WashingtonWatch.com. Least Expensive Bill of the WeekThe Bill: H.R. 1837, the Sacramento-San Joaquin Valley Water Reliability Act Annualized Savings: $98 million ($489 million over five years)
The bill, introduced by Congressman Devin Nunes (R-CA), would modify the San Joaquin River Restoration Settlement Act that regulates the flow and use of water in the Sacramento and San Joaquin Valley areas of California. That Act was passed in 2009 to implement a settlement between federal and state agencies and the National Resources Defense Council. The settlement was reached after an 18-year long lawsuit to protect and conserve fish habitats in the San Joaquin River. Since implementation of the settlement, farmers dependent on the water for field irrigation have complained that they are receiving, on average, 35 to 40 percent of their water supply allotment. The water flow that they used to receive is being reallocated to protect the fish habitats, and farmers are facing what they call, a "man-made drought." HR 1837 would reduce the miles of land targeted in the settlement for conservation of fish habitats from 153 to 65, and would deauthorize a salmon restoration program. The bill would also modify the water service contracts for Central Valley Project water customers, allowing for accelerated repayment of their share of the capital investment in the project. Additional sections of the bill would reform the management of the Central Valley Project designed to increase transparency. CBO estimates that these reforms would save $190 million over five years and the accelerated repayment of contracts would increase offsetting receipts by $299 million, also over five years. The House passed the bill in March. The White House has threatened to veto the bill in part because of concern that modifying the settlement would open the door to more lawsuits. The White House also raised concerns that the bill would result in "inequitable treatment of one group of water users over another." To learn more or discuss this bill visit WashingtonWatch.com. Most FriendedThe Bill: H.R. 3826/S. 2051, a bill to amend the Higher Education Act of 1965 to extend the reduced interest rate for Federal Direct Stafford Loans Annualized Cost: $3.0 billion ($6.0 billion over two years) Number of Cosponsors: 153 Congressmen and 18 Senators Student loan debt has been a hot button issue on Capitol Hill for the past few weeks. The Senate is currently reconsidering whether and how to extend the low interest rates on existing federally subsidized loans. With the possibility of rates doubling from 3.4 to 6.8 percent, Republicans and Democrats are attempting to come to agreement on how the extension will be paid for. Approximately 7.4 million students and former students will be affected if interest rates change. H.R. 3826 and S. 2051 call for the 3.4 percent rate to continue through the rest of the year in what would be a six-month extension. Sponsored by Congressman Joe Courtney (D-CT) and Senator Jack Reed (D-RI), the bills do not address how the new costs would be offset. Senator Reed said, "It is in our national interest to try and keep student loan rates low. As the price of college continues to increase, more students are forced to take out bigger loans to pay for their education." Based on a CBO cost estimate for related legislation, H.R. 4628, the Interest Rate Reduction Act, NTUF estimates that H.R. 3826 and S. 2051 would cost $6.0 billion over the next two years. Cosponsors include 152 Democrats and one Republican in the House. In the Senate, all 18 Senators who support S. 2051 caucus with the Democratic Party. To learn more or discuss this bill visit WashingtonWatch.com. Support NTUF The National Taxpayers Union Foundation is able to produce timely reports and analysis for policymakers and taxpayers with the help and support of foundations, small businesses, and Americans -- like you -- who wish to stay informed of their government's spending. With donations from Tab subscribers and members, NTUF will be able to continue to simplify important entitlement reform plans, examine budgets, and score legislation. Please consider making a tax-deductible contribution to NTUF. |