Government Column


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Federal Reserve Transparency Act of 2009 (HR 1207)

Federal Reserve Bank in New YorkRepresentative Ron Paul, Republican from Texas and long-time favorite of the Internets, introduced a bill earlier this year called the Federal Reserve Transparency Act of 2009 (H.R. 1207). HR 1207, which now has 303 co-sponsors and last saw action in committee hearings on September 25th, would call for a full audit of the Federal Reserve by the Government Accountability Office before the end of 2010. The audit would be reviewed by Congress.

I think accountability is fundamental and I agree with many that the secrecy of the Fed, protected by the U.S. Code under 31 USC 714 – Sec. 714, is not in keeping with the transparency and openness we should require of our public officials (I understand the Fed technically only quasi-public, but for all intents and purposes it’s public in my mind). I understand it when we need to keep things hidden for purposes of national security but I don’t think this extends to national financial security.

(click here to continue reading…)

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First Time Homebuyer Tax Credit Extension (HR 3842)

Representative Kurt Schrader, Democrat from Oregon, and Representative Steve Driehaus, Democrat from Ohio, have co-sponsored a bill, H.R. 3842, that would amend the Internal Revenue Code of 1986 to extend the first time homebuyer tax credit.

The current first time homebuyer credit is set to expire on December 1st, 2009. Schrader’s bill would do two crucial things:

  • The program would be extended to October 1st, 2010,
  • Homes purchased “after 2008,” rather than “in 2009″ would be elivible.

There is also one other change, you could treat the purchase of a home after December 31st, 2009 and before October 1st, 2010 as occurring on December 31st, 2009 for tax purposes. In other words, if you bought the house in 2010, you could take the credit on your 2009 tax return.

Don’t get too excited just yet, the bill was introduced on the 15th and was referred to the Committee on Ways and Means. Several bills just like this one have been introduced over the last few months and died in the Committee on Ways and Means (HR 1993, HR 2606, HR 2655, HR 2905… the list keeps going).

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Unemployment Benefits Extension Stalls in Senate

Update Oct. 18: The Senate has come to the decision to modify the House bill to include all states, not just ones with unemployment rates greater than 8.5%. The change will come in the form of S. Amndt. 2668 to the House Bill, H.R. 3548 according to Open Congress blogger Donny Shaw.

In normal times, unemployment benefits last twenty-six weeks after someone loses their job. In normal times, it takes newly unemployed people less than 26 weeks to find a job… until today. But we aren’t in normal times. According to data from the Bureau of Labor Statistics, this is the first time since 1948, when they started collecting this information, that the average time it takes to find a job is longer than the 26 weeks of state unemployment benefits.

The House of Representatives passed a bill last month (H.R. 3548) that would extend unemployment benefits in high-unemployment states by 13 weeks. The Senate is debating similar bills (S. 1699 was referred to committee) and the fight is over who gets benefits and how much.

S. 1699 would give an extra 13 weeks to states with unemployment rates higher than 8.5% funded by extending unemployment tax on employers.

(click here to continue reading…)

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HAPPY Act: $3,500 Pet Care Expenses Deduction (Proposed)

Jim & TobeyWouldn’t you throw your support behind something called the HAPPY Act? I know I would, it sounds so… cheery!

It exists and it’s a bill that has been introduced in the House of Representatives by Representative Thaddeus McCotter (R-MI). The Humanity and Pets Partnered Through the Years (HAPPY) Act, H.R. 3501, would offer a $3,500 tax deduction for qualified pet care expenses. A qualified pet is a “legally owned, domesticated, live animal” that isn’t used for research or business. Expenses cover pet products, service, veterinary visits, and basically anything that is related to the care of a pet.

It seems like a difficult time to be introducing this bill when we have so many other economic issues to deal with but it sure is sweet. :)

First reaction: Frivolous deficit spending? Or legitimate deduction we should entertain?

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How to Read Your Social Security Statement

If you have a job, you’re paying into the Social Security program. Social Security, or more officially and appropriately, the Old age, survivors, and disability insurance program (OASDI); is more than just a check when you retire or a payroll deduction on your pay stub. In addition to the “old age” portion, it is also a disability insurance program that provides for individuals who are unable to work because of a disability.

Each month, you pay 6.2% of your paycheck into the OASDI program, up to a limit of $6,621.60 a year (the tax is only on the first $106,800 of earnings). Three months before your birthday, you will receive a Social Security Statement. This post will explain how to read and review that Social Security statement.

(click here to continue reading…)

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FHA Mortgage Loan Requirements Guide

Gingerbread HouseWhen I was reading Dale Siegel’s The New Rules of Mortgages, was struck by the sheer number of available mortgage options available to Americans. I knew about your standard vanilla varieties (30 year fixed, 15 year fixed), even the trickier ones (ARMs, Option ARMs), but I knew very little about the various government sponsored programs designed to help low to moderate income or first time hombuyer families get a piece of homeownership.

One of these programs is the FHA, or Federal Housing Administration, mortgage insurance program. It’s part of the U.S. Department of Housing and Urban Development (HUD) and the FHA provides mortgage insurance on loans made by FHA-approved lenders. The logic behind the program is that low and moderate income families and first time homebuyers, especially in these economic times, may need a little extra help in the homeownership process. This help comes by way of an insurance program, that the borrowers will pay for at least five years of the loan, offered by the government.

(click here to continue reading…)

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Medicare & Medicaid Health Insurance Programs Explained

I’ve never had the need or the opportunity the learn about Medicare or Medicaid, two government programs that garner a lot of attention every two years, and that have recently been in the news because of President Obama’s attempts to bring about health care reform. Like many people, I didn’t understand how either program worked so I decided to do some research and put together this Foundation post.

The biggest difference between the two is eligibility based on financial need. Medicaid is designed to help low-income, financially needy individuals and is administered differently in each state. Medicare is not based on need and is entitlement based, through your payments into the program through your taxes. Medicare is administered nationally and the rules are the same everywhere.

If you’re curious to learn more, read on plucky adventurer because it starts getting a little more complicated. :)

(click here to continue reading…)

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Credit Card Reform Imminent: Senate Passes CARD Act of 2009

May 20th Update: The House of Representatives gave their approval of the CARD Act passed in the Senate and the bill is on its way to President Obama.

Today, the Senate voted 90-5 in favor of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009, which is one step closer to credit card reform in America. In April, the House of Representatives passed a similar Credit Cardholders’ Bill of Rights Act of 2009 (357-to-70) and now the two chambers must reconcile the bills for President Obama to sign into law.

Here are the major parts of the Senate CARD Act:

  • Credit card companies cannot raise interest rates on existing balances unless a card holder was 60 days behind.
  • If a credit card company raises rates, six months of on-time payment would restore the interest rate to the previous level.
  • Companies must notify consumers 45 days in advance of any rate increases.
  • Companies cannot charge a late fee if they were late in processing a payment.
  • Statements must be mailed 21 days before the payment due date.
  • Rules were put in place that would make it harder for for companies to issue cards to those under 21.
  • Interest rates cannot be increased within the first 12 months, promotional rates must be in place a minimum of 6 months.

The major points of the House’s Credit Cardholders’ Bill of Rights Act of 2009 are similar. The House’s version also requires promotional rates to remain in effect for a minimum of 6 months and other similarities regarding interest rate hikes and payment rules. There are additional rules in the House version that remain to be reconciled. For example, in the House bill, credit card companies must warn a customer if they get close to their credit limit.

It’s expected that the two bills will be reconciled and President Obama will be able to sign the bill into law before Memorial Day recess.

Credit Cardholders’ Bill of Rights Act of 2009 [Thomas.gov]
Credit CARD Act of 2009 [Thomas.gov]
Senate Passes Bill to Restrict Credit-Card Practices [New York Times]

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