Today, the Senate voted to extend the closing deadline for people eligible for the first-time homebuyer's tax credit. There's a whole separate blog post about the merits (or lack thereof) of the extension itself, but I thought it was very interesting that the Senate also voted to "offset" the lost revenue and had two very clear options to do so: higher taxes elsewhere or reduced spending. I'm sure you'll all be shocked (SHOCKED!) to hear that they chose higher taxes elsewhere.
Senator Jonny Isakson introduced an amendment to extend the closing deadline and offset it by eliminating unobligated funds from the $862 gajillion (Hah! Just seeing if you're paying attention, it's ONLY $862 billion) stimulus package. Makes perfect sense, right? Offset reductions in revenue by reducing wasteful unspent stimulus dollars. While you may not agree with the extension of the credit, at least this is a fiscally responsible way to do it. Naturally, this eminently reasonable amendment failed by a vote of 45-52. The supporters were mostly Republicans, but kudos to Democratic Senators Bayh (IN), Conrad (ND), Dorgan (ND), Klobuchar (MN), Lincoln (AR), Nelson (FL), Nelson (NE), and Webb (VA) for doing the right thing as well.
Instead, the Senate voted 60-37 to support an amendment introduced by Senator Reid (D-NV) that will instead raise taxes on other people to offset the reductions in revenue. Specifically, the amendment would deny businesses a previously-available tax deduction for punitive damages resulting from a lawsuit. My friend Ryan Ellis does a terrific job of explaining why this is bad policy, but this is yet another great example that this Congress will, at every turn, raise taxes instead of addressing runaway spending.