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Republicans block bill to renew expired tax breaks

By WTOP Staff

STEPHEN OHLEMACHER
Associated Press

WASHINGTON (AP) — Senate Republicans blocked a bill Thursday that would renew more than 50 expired tax breaks affecting millions of businesses and individuals.

The bill has widespread bipartisan support, but Republicans were unhappy because Senate Majority Leader Harry Reid, D-Nev., wouldn’t agree to vote on GOP amendments. A similar dispute derailed an energy bill earlier this week.

“Why are Washington Democrats so afraid of a free and open exchange of ideas?” Senate Minority Leader Mitch McConnell, R-Ky., said. “What are they afraid of?”

Reid called the dispute over amendments a “phony issue.”

“All this amendment stuff is just the talking points they have today,” Reid said. “If they think it’s going to help the country to kill this package that was exquisitely put together by the Finance Committee, I think that’s too bad.”

Almost every year, Congress routinely renews the tax breaks. This year, though, they were allowed to expire at the start of the year. The package has strong backing from the business community but would add about $85 billion to the budget deficit.

Thursday’s vote was 53 to 40, which was seven votes shy of the 60 votes needed to advance the bill. Some Republican senators said they expected the bill to come up again, perhaps after congressional elections in November.

“We’ll get this bill through one way or the other,” said Sen. Orrin Hatch of Utah, the top Republican on the Senate Finance Committee. But, he added, “I consider the way the Senate is being run right now to be an absolute tragedy.”

Republican amendments included making some of the tax cuts permanent while adding others, including the repeal of a medical device tax that helps fund President Barack Obama’s health care law.

“Today the Senate voted to punish innovators, punish small businesses, punish homeowners who are underwater with their mortgages, punish returning veterans looking for jobs and punish students already struggling to pay for college tuition,” said Sen. Ron Wyden, D-Ore., chairman of the Finance Committee. “I continue to be open to narrowly related amendments similar to those added in committee that strengthen the bill. In terms of next steps, I am pushing ahead today, working with my colleagues on both sides of the aisle to find a path forward.”

The bill pairs tax breaks that affect millions with others that don’t.

Among the biggest breaks for businesses:

— A tax credit for research and development.

— An exemption that allows financial companies to shield foreign profits from being taxed by the U.S.

— Several provisions that allow businesses to write off capital investments more quickly.

— A generous tax credit for using wind farms and other renewable energy sources to produce electricity.

The biggest tax break for individuals:

— People who live in states without an income tax could deduct state and local sales taxes on their federal returns.

— Struggling homeowners who get their mortgages reduced would be protected from paying income taxes on the amount of debt that was forgiven.

Other more narrow provisions include tax breaks for film and theater producers, NASCAR race track owners, manufacturers of electric motorcycles and teachers who spend their own money on classroom supplies.

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Follow Stephen Ohlemacher on Twitter: http://twitter.com/stephenatap

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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