Pay raise for federal judges and tax shelters snuck in Auto Rescue/Bailout bill

John Neff — Thu, 11 Dec 2008 14:29:00 EST

Let's say you're a Congressman and your constituents are begging for a bronze statue of Johnny Cash in the center of town. Fortunately, there's an important bill being voted on this week, so you just slide a federal funds provision for "urban improvement" in there and vote Yes for the larger matter along with your buddies. It's called pork and the Auto Rescue/Bailout Bill approved by the House last night contains a couple bites of it.

In addition to approving $14 billion in government loans for the Detroit 3, the bill also provides a cost of living adjustment (COTA) for federal district judges, otherwise known as a good old raise. They currently make $169,300/year, which some fear is too little for the important function they serve. Normally these judges earn exactly what those in Congress make, but while politicians in the House and Senate automatically get a COTA each year, they must vote to give the same to judges. The Senate has already approved this year's COTA for judges, but the House hasn't. To remedy this, Senate Majority Leader Harry Reid (D-NV) slipped the provision into the Auto Rescue/Bailout Bill. This also has the added benefit of hiding the raise behind the larger issue of aid for U.S. automakers, as the general populace might not look kindly on any government employee getting more money in the midst of a recession.

The other piece of pork in the bill involves a big tax shelter for corporations that allows them to avoid paying taxes. We had a hard time following exactly how this one works, but Zac over at BloggingStocks is really miffed about it, so it must be bad.

[Source: Wall Street Journal, BloggingStocks]

Pay raise for federal judges and tax shelters snuck in Auto Rescue/Bailout bill originally appeared on Autoblog on Thu, 11 Dec 2008 14:29:00 EST. Please see our terms for use of feeds.

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House passes Auto Rescue/Bailout Bill, still faces heavy Senate opposition

John Neff — Wed, 10 Dec 2008 22:42:00 EST

Filed under: Government/Legal, Chrysler, Ford, GM

The U.S. House of Representatives voted late Wednesday to pass the Auto Rescue/Bailout Bill by a vote of 237 to 170. The contents of the bill came from concessions made by Congressional Democrats to White House demand, which include $14 billion in government loans, $1 billion less than was previously discussed, and the creation of a "Car Czar" appointed by the president to oversee the automakers' progress. It is widely recognized that the bill is a stop-gap measure meant to float General Motors and Chrysler through the end of March. This would give them time to renegotiate with its creditors, the UAW and other companies. If all goes well, the status of GM and Chrysler will be reviewed around March 31st to determine if further federal assistance is required, which it likely would be unless the economy magically recovers and people start buying new vehicles again in larger numbers.

Continue reading House passes Auto Rescue/Bailout Bill, still faces heavy Senate opposition

House passes Auto Rescue/Bailout Bill, still faces heavy Senate opposition originally appeared on Autoblog on Wed, 10 Dec 2008 22:42:00 EST. Please see our terms for use of feeds.

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