New law helps jobless workers, provides tax relief

By Sen. Olympia J. Snowe | Dec 01, 2009

Washington, D.C. — Despite modest progress, the nation’s economy remains in recession, threatening the financial stability of millions of hardworking Americans in Maine and across the country. Indeed, today the national unemployment rate stands at a stunning 10.2 percent, its highest level in 26 years.

Maine’s unemployment, at 8.2 percent in October, is not too far behind. As families continue to grapple with the unprecedented challenges of the crippling economy, I believe it is incumbent upon Congress to advance policies that will provide incentives that will grow the economy.

For this reason, I worked with my colleagues in the Senate to enact bipartisan legislation that will expand the safety net for workers who have lost their jobs as a result of the devastating economic conditions. H.R. 3548, which was signed into law Nov. 6, provides an additional 14 weeks of unemployment assistance for jobless workers who have exhausted their benefits and an additional six weeks for those living in states where the unemployment rate equals or exceeds 8.5 percent.

While extending unemployment benefits, especially during these times of increased distress in the job market, will guarantee our jobless workers have access to the resources they need until they are able to get back on their feet and into the work force, this new law also includes vital tax relief to assist American companies with cash flow and help stabilize the housing market.

Under current law, “net operating loss carrybacks” exist to help companies recoup their losses by offsetting taxable income from previous tax years.  Recognizing the adverse impact of the ailing economy on businesses earlier this year, I fought to establish a five-year carryback (current law allows only a two-year carryback) for net operating losses in 2008 for smaller firms with gross receipts under $15 million in the economic stimulus bill that was signed into law in February.

To help further generate cash flow for American businesses, I worked with Chairman of the Senate Finance Committee Max Baucus, D-Montana, to include a provision that would expand current law to include small, medium and large firms. By adjusting the tax code to provide timely and targeted relief for every company, regardless of its size, this provision will go a long way in helping business owners sustain overall operations and keep more workers on payroll.

In addition, H.R. 3548 extends the current $8,000 first-time homebuyer tax credit through April 30, 2010, for closings taking place prior to June 30, and expands it to include a $6,500 move-up buyer credit for new purchasers who have been in their primary residences for five years.

Since its enactment in February, this vital tax incentive has bolstered the housing market in our nation, with sales increasing 1.5 percent this year. In fact, Mark Zandi, of Moody’s, attributes roughly 400,000 home sales to the credit.  And, according to the National Association of Realtors, every time a home in Maine is sold, it generates additional economic activity estimated to be over $11,000.

In my view, by extending the credit for a few more months – through the dark days of winter when home sales are in their slowest season – this credit will provide a strong incentive to tentative buyers and help encourage home sales.

During these trying economic times, every dollar counts, and, as we continue to weather this economic storm, I will continue to advocate policies that will lift the economy and put us back on the road to recovery.

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