Honey + Vinegar = Bailout?

So, what does it take to get reluctant house members to vote for a bailout? So-called "sweeteners," tax breaks the Senate added to the bill to make it irresistible.

The LA Times reports those tax breaks aren't just popular, they're calculated to woo specific House members into changing their votes from no to yes:

[T]he bill now includes a provision to boost insurance coverage of mental illness, a priority of Rep. Jim Ramstad (R-Minn.), who voted against the bailout bill Monday. It also includes a tax benefit for bicycle commuting sought by Rep. Earl Blumenauer (D-Ore.), also a no vote on Monday. And there's an extension of the renewable energy tax credit, a priority of Rep. Gabrielle Giffords (D-Ariz.), who wants to make Arizona the "Silicon Valley of solar energy."

The tax breaks and accounting rule changes for Hollywood were apparently aimed at two Southern California Democrats -- Rep. Adam B. Schiff of Burbank and Rep. Brad Sherman of Sherman Oaks -- who voted against the plan. Sherman, who led the defection of a group of Democratic skeptics, insisted that he would not be enticed to vote for the rescue plan.

These tax breaks come with a big price tag of $100 billion, though, attached to the already enormous $700 billion for the bailout. And those tax breaks will make the bill less attractive to at least a few House members, who believe that any tax cuts need to be deficit neutral. One in that camp is Rep. Lloyd Doggett (R-Texas):

"The Senate measure has changed my position from 'No' to 'Heck no,' " he said. "With the Senate amendment, the bailout has gone from bad to worse, $105 billion more in public debt worse."

--Laurel Wamsley

11:37 AM ET | 10- 2-2008 | permalink

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