Public Law 110-343
Great Seal of the United States
Long titleA bill to provide authority for the Federal Government to purchase and insure certain types of troubled assets for the purposes of providing stability to and preventing disruption in the economy and financial system and protecting taxpayers, to amend the Internal Revenue Code of 1986 to provide incentives for energy production and conservation, to extend certain expiring provisions, to provide individual income tax relief, and for other purposes.
Enacted bythe 110th United States Congress
Citations
Public lawPub. L.Tooltip Public Law (United States) 110–343 (text) (PDF)
Legislative history
  • Introduced in the House as H.R. 1424 by Patrick J. Kennedy (D-RI) on March 9, 2007
  • Passed the House on March 5, 2008 (268-148)
  • Passed the Senate on October 1, 2008 (74-25)
  • Agreed to by the House on October 3, 2008 (263-171)  
  • Signed into law by President George W. Bush on October 3, 2008
President George W. Bush delivers a statement at the White House regarding the economic rescue plan

Public Law 110-343 (Pub. L.Tooltip Public Law (United States) 110–343 (text) (PDF), 122 Stat. 3765, enacted October 3, 2008) is a US Act of Congress signed into law by U.S. President George W. Bush, which was designed to mitigate the growing financial crisis of the late-2000s by giving relief to so-called "Troubled Assets."[1][2]

Its formal title is "An Act To provide authority for the Federal Government to purchase and insure certain types of troubled assets for the purposes of providing stability to and preventing disruption in the economy and financial system and protecting taxpayers, to amend the Internal Revenue Code of 1986 to provide incentives for energy production and conservation, to extend certain expiring provisions, to provide individual income tax relief, and for other purposes."

The Act created a $700 billion (~$939 billion in 2022) Troubled Asset Relief Program under the Emergency Economic Stabilization Act of 2008 (division A), and also enacted the Energy Improvement and Extension Act of 2008 (division B), Tax Extenders and Alternative Minimum Tax Relief Act of 2008 (division C), which also included the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, and the Heartland Disaster Tax Relief Act of 2008.[3][4]

Legislative history

The first version of the Emergency Economic Stabilization Act of 2008 (structured as an amendment to H.R. 3997) was rejected by the House of Representatives on September 29, $700 billion (~$939 billion in 2022).

After its defeat, Senate leaders decided to amend an existing bill from the House in order to circumvent the revenue origination clause of U.S. Constitution, and chose H.R. 1424 as the vehicle for the legislation.[5][6][7][8] H.R. 1424 was sponsored by United States House Representative Patrick J. Kennedy.[3]

On September 30, 2008, Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell announced the proposed draft had been formalized for the amendment that would transform H.R. 1424 into the Senate version of the Emergency Economic Stabilization Act of 2008.[9][10][11]

On October 1, 2008, the amendment to H.R. 1424 was approved by a vote of 74 to 25, and the entire amended bill was passed by 74 to 25, (with one not voting, the cancer-stricken Senator Ted Kennedy). The bill was returned to the House for consideration.[12][13] On October 3, 2008, the bill as passed by the Senate was accepted by a vote of 263 to 171 in the House. Every member of the House voted, though the House had a vacant seat of the recently deceased Stephanie Tubbs Jones of Ohio. President George W. Bush signed the bill into law a few hours later.[14][15]

Divisions

Emergency Economic Stabilization Act of 2008

The first title of the act included The Emergency Economic Stabilization Act of 2008 which created the Troubled Asset Relief Program in an effort to bail out firms holding mortgage-backed securities and to restore liquidity to the credit markets.[16]

Energy Improvement and Extension Act of 2008

The Energy Improvement and Extension Act of 2008 create a new tax credit for qualified plug-in hybrid electric vehicles "purchased between January 1, 2009, and December 31, 2014."[17] This credit was phased out once 250,000 vehicles were sold. The credit is a base $2,500 plus $417 for each kWh of battery pack capacity in excess of 4 kWh to a maximum of $15,000 for any vehicle with a gross vehicle weight rating of more than 26,000 pounds (12,000 kg) [18] and up to $7,500 for 12 kWh or more in passenger cars (vehicles up to 8,500 pounds (3,900 kg) ).

The act also "extended production tax credits (PTC) and investment tax credits (ITC) for various renewable energy sources, which were due to expire at the end of 2008."[19] Included extensions were "energy efficiency tax deductions for commercial buildings through 2013" as well as adding a $300 tax credit for the installation of "energy-efficient biomass fuel stoves" in homes during 2009.[19]

Also included in the act was $800 million in funding for Qualified Energy Conservation Bonds, which were to be issued by state and local governments. Ultimately, the Tax Cuts and Jobs Act of 2017 would repeal the tax credit bonds effective January 1, 2018.[20]

Other existing tax credits for renewable energy initiatives, including cellulosic ethanol and biodiesel development, and wind, solar, geothermal and hydro-electric power were initiated.[21] Electricity had its definition changed to be qualified as an alternative fuel.[17]

Separately, this section also requires the reporting of cost basis by brokers to the IRS for certain securities acquired after 2011 – see covered security.

Tax Extenders and Alternative Minimum Tax Relief Act of 2008

The Tax Extenders and Alternative Minimum Tax Relief Act includes $100 billion in tax breaks for businesses and the middle class, plus a provision to raise the cap on federal deposit insurance from $100,000 to $250,000.[22]

The Act keeps the alternative minimum tax from hitting 20 million middle-income Americans. It provides $8 billion in tax relief for those hit by natural disasters in the Midwest, Texas and Louisiana.[22]

As a whole, the Senate tax package would cost $150.5 billion over 10 years. Roughly $43.5 billion would be offset by several revenue-raising provisions. Hedge fund managers would be forbidden from using offshore corporations to defer paying taxes.[5]

The bill freezes a tax deduction that oil and gas companies get for certain domestic production activities. The deduction, now 6 percent, is scheduled to rise to 9 percent in 2010.[5]

The provisions of the tax bill included: [12][23][24]

Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (a part of Division C) mandates that if U.S. health insurance companies provide coverage for mental health and substance abuse, the coverage must be equal for conditions such as psychological disorders, alcoholism, and drug addiction.[4][27][28] This act continues and expands upon the previous Mental Health Parity Act of 1996. It states that financial requirements such as deductibles and copayments and lifetime or dollar limits to mental health benefits and substance abuse disorder benefits should be no more restrictive than those on medical and surgical benefits.[29] MHPAEA applies to employer-sponsored health insurance plans with more than 50 employees, though parity is also extended to small group and individual plans under the Affordable Care Act.[30]

Secure Rural Schools and Community Self-Determination Act of 2000

The Secure Rural Schools and Community Self-Determination Act of 2000 (a part of Division C) provided $1.645 billion (~$2.67 billion in 2022) in funding over a four-year period for re-authorization of the aforementioned act.[4] Original funding for the "authorization for the program expired in 2006" followed by Congress providing one year extensions in the intervening periods.[31] The funding was distributed to states "to improve cooperative relationships among—the people that use and care for Federal land".[4]

Cost

The Act increased the statutory limit on the public debt by US$700 billion to US$11.3 trillion. However, the legislation is designed to have a net zero long-term cost, and includes language that mandates the President and Congress to develop a plan to recoup any money that is not recouped within 5 years.[3][32]

Reception

Supporters of the bill believed that it was necessary in "preventing the collapse of the financial system and a deep recession".[33] Critics asserted that the bill "unfairly benefited investors" while also failing to provide an adequate response to the economic crisis of the time.[33] Journalists commented that portions of the bill contained earmarks and pork barrel spending.[34][35][36][37][38][39]

References

  1. ↑ President Bush Signs H.R. 1424 Into Law, White House Press Release, October 3, 2008.
  2. ↑ "Renewable Energy Tax Credits Extended as Far as 2016 (Energy Priorities Archives)". energypriorities.com. Retrieved 9 September 2018.
  3. 1 2 3 "H.R.1424". THOMAS. Library of Congress. 2008-10-03. Archived from the original on 2008-09-23. Retrieved 2008-10-03. (Access to legislative history of H.R. 1424)
  4. 1 2 3 4 Pub. L.Tooltip Public Law (United States) 110–343 (text) (PDF)
  5. 1 2 3 Pear, Robert (2008-10-02). "Crisis Puts Tax Moves Into Play". New York Times. Retrieved 2008-10-05. The House jealously guards its power to originate tax bills. The Constitution says, "All bills for raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other bills." The Senate version of the bailout package is technically an amendment to a House bill that would require group health insurance plans to provide equivalence, or parity, in the coverage of mental and physical illnesses.
  6. ↑ "Calendar of Business: Wednesday, October 1, 2008 (Legislative Day, September 17, 2008)" (PDF). Calendar of the United States Senate. Clerk of the United States Senate / Government Printing Office. 2008-10-01. Retrieved 2008-10-01.
  7. ↑ Rushing, J. Taylor (2008-10-01). "Senate easily passes bailout". The Hill. Retrieved 2008-10-05. The Senate's action was a dramatic and rare move that circumvented a constitutional requirement that tax legislation must originate in the House
  8. ↑ Mulligan, John E. (2008-10-02). "Kennedy's unintended role in history". The Providence Journal. Retrieved 2008-10-02. Once the Senate added those provisions to the rescue bill, it qualified as a tax bill, which the upper chamber is constitutionally prohibited from originating. In order to get around the Constitution, the leaders turned to the time-honored stratagem of finding a live but dormant House bill — [Patrick] Kennedy's mental-health parity bill — to use as a shell.
  9. ↑ Ives, Benton; Richard Rubin; Joseph J. Schatz (2008-10-01). "Senate Bailout Vote Will Put House on Spot Again". QQ Politics. Congressional Quarterly.
  10. ↑ "Bailout: Senate to vote Wednesday". CNNMoney.com. 2008-10-01. Retrieved 2010-05-22.
  11. ↑ "Obama, McCain stress urgency of bailout vote". CNN. 2008-10-01. Retrieved 2010-05-22.
  12. 1 2 Hulse, Carl; David M. Herszenhorn (2008-10-01). "Adding Sweeteners, Senate Passes Bailout Plan". New York Times. Retrieved 2008-10-01.
  13. ↑ United States Senate. 110th Congress (2nd Session) Roll call vote #213
  14. ↑ Burdick, Dave (2008-10-03). "House Bailout Bill Friday Vote: YEA - 263, NAY - 171". Huffington Post. Retrieved 2008-10-03.
  15. ↑ United States House of Representatives. 110th Congress (2nd Session) Vote Number 681
  16. ↑ Bardeesy, Karim (2008-10-02). "Bailout Baloney: What do wooden children's arrows have to do with the credit crisis?". The Big Money.
  17. 1 2 "Alternative Fuels Data Center: Energy Improvement and Extension Act of 2008". afdc.energy.gov. Retrieved 2023-01-31.
  18. ↑ "$1Billion Plug-In Incentives Will Speed Auto Industry's Transformation". www.calcars.org. Retrieved 9 September 2018.
  19. 1 2 "Energy Improvement and Extension Act 2008 - Tax Incentives – Policies". IEA. Retrieved 2023-01-31.
  20. ↑ "Qualified Energy Conservation Bonds". Energy.gov. Retrieved 2023-01-31.
  21. ↑ "Used Chevrolet Volt for Sale Near Me". Edmunds.com. Archived from the original on December 7, 2008. Retrieved January 31, 2023.
  22. 1 2 Babington, Charles; Julie Hirsschfeld Davis (2009-10-02). "Bush lobbies Congress to pass $700B bailout bill". Associated Press.
  23. ↑ Abrams, Jim (2008-10-01). "Stalled tax relief bill attached to rescue package". Associated Press. Archived from the original on 2015-09-24. Retrieved 2008-10-01.
  24. ↑ Hulse, Carl & Pear, Robert (2008-10-01). "Senate to Vote Today on the Bailout Plan". New York Times. Retrieved 2008-10-01.
  25. ↑ Orszag, Peter R. (October 1, 2008). "CBO's Analysis of Dodd Substitute Amendment for H.R. 1424" (PDF). Congressional Budget Office. p. 2. Retrieved 2008-10-03.
  26. ↑ Stout, David (October 2, 2008). "What an Arrow Shaft Has to Do With a $700 Billion Rescue Plan". The New York Times.
  27. ↑ "Equal treatment: A bailout law bonus — equal coverage for mental and physical illness". Houston Chronicle. 2008-10-06.
  28. ↑ Glantz, Aaron (2008-10-07). "U.S. Insurers Told to Cover Mental Health Equally". OneWorld. Retrieved 2008-10-08.
  29. ↑ "Fact Sheet: The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA)". U.S. Department of Labor. Retrieved 10 December 2013.
  30. ↑ Beronio, Kirsten; Po, Rosa; Skopec, Laura; Glied, Sherry (February 20, 2013). "Affordable Care Act Expands Mental Health and Substance Use Disorder Benefits and Federal Parity Protections for 62 Million Americans". ASPE: Office of The Assistant Secretary for Planning and Evaluation. U.S. Department of Health and Human Services. Retrieved 10 December 2013.
  31. ↑ "President Signs Funding Measure for Four-Year Extension of Secure Rural Schools Program". United States Senator for California. Retrieved 2023-01-31.
  32. ↑ Orszag, Peter (2008-10-01). "Letter from Congressional Budget Office Director". Congressional Budget Office. Retrieved 9 May 2010. That net cost is likely to be substantially less than $700 billion but is more likely than not to be greater than zero.
  33. 1 2 "Emergency Economic Stabilization Act of 2008 | United States legislation | Britannica". www.britannica.com. Retrieved 2023-01-31.
  34. ↑ Bernstein, James (2008-10-04). "Bailout bill brings home the bacon". Newsday.
  35. ↑ Shear, Michael (2008-10-03). "With Bailout Vote, McCain Voted for Earmarks". Washington Post.
  36. ↑ Coile, Zachary (2008-10-03). "Billions in earmarks in Senate's bailout bill". San Francisco Chronicle.
  37. ↑ Lendman, Stephen. "Grand Theft America". Baltimore Chronicle.
  38. ↑ Popkin, Jim (2008-10-03). "Critics say bailout bill is stuffed with billions in pork". MSNBC. Archived from the original on October 5, 2008. Retrieved 2008-10-04.
  39. ↑ Kugler, Sara (2008-10-02). "McCain struggles to explain support for bailout". USA Today. Associated Press. Retrieved September 16, 2012.
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