The bailout bill

That bill we’ve been referring to as the “$700 billion Wall St. bailout” bill? It actually has a title:

To amend the Internal Revenue Code of 1986 to provide earnings assistance and tax relief to members of the uniformed services, volunteer firefighters, and Peace Corps volunteers, and for other purposes

That’s the official title. The unofficial (short) title is Emergency Economic Stabilization Act of 2008. Here’s the full text of the bill. Here’s a fascinating dissection of it on

The bill, HR 3997, was originally known as the Heroes Earnings Assistance and Relief Tax Act of 2007.

The HEART Act allows combat pay to be used as earned income for purposes of claiming the Earned Income Tax Credit. It makes permanent expiring Tax Code provisions that allow active duty reservists to make penalty-free withdrawals from their retirement plans, and let employers make contributions to retirement plans on behalf of an employee who has been disabled or killed in combat. It also includes tax benefits for other volunteers by clarifying that rebates of state and local taxes for volunteer firefighters and that reimbursements for expenses incurred in the line of duty by volunteer firefighters are not taxable.

It passed the House unanimously last November. Another version passed the Senate. It was known as the Defenders of Freedom Tax Relief Act of 2007. A final bill was agreed to and then it died from inaction with the last legislative action dated December 20, 2007.

The bill had been loaded up. It aided education for returning veterans, prohibited group health plans that provide medical, surgical care and mental health care from imposing coverage limits on mental health. It has been brought back a number of times to forgive nursing student loans. It died originally, apparently, because of a provision for an exit tax for Americans who renounce their citizenship or terminates residency in the U.S. In other words, people who were trying to avoid paying taxes.

Sometime after its late December death, the original provisions of the bill (and the Exit Tax) resurfaced in another bill last spring, HR 6081. It was passed by Congress and signed into law by President Bush in June.

That left HR 3997 still hanging around with nothing to do, so it was used for the bailout bill, with its official title still intact, and no longer making any sense.

With its defeat, it apparently is still available for future uses, too.

It actually sounded easier on Schoolhouse Rock.