December 24, 2015


Three things Congress actually did right this year (Charles Lane, December 23, 2015, Washington Post)

First, a provision in the year-end omnibus spending bill abolished the 40-year-old ban on crude-oil exports from the United States. Enacted after the 1973-74 Arab oil embargo, the ban was a simplistic means to a valid end: limiting the United States' vulnerability to the price-gouging of oil-exporting nations.

Subsequent history, however, proved the superior power of market forces, which broke down the oil-exporting cartel and stimulated the production of vast new amounts of oil within the United States itself.

The problem now is that much U.S. crude is ill-suited, chemically, for U.S. refineries but could be readily refined abroad. [...]

Congress's second good deed was to make permanent some enhancements to the earned-income tax credit that were enacted in the 2009 economic stimulus package but extended only on a temporary basis.

Essentially a wage subsidy for adults with children, the credit has been one of the federal government's most successful tools for encouraging work and fighting poverty since it was first enacted during the Ford administration.

For technical reasons, however, it included a "marriage penalty" that reduced the subsidy for low-income families in which both parents held jobs and were committed to each other -- the ultimate perverse incentive. [...]

Finally, the National Defense Authorization Act has modernized military compensation, so that soon almost all U.S. troops will have some access to retirement benefits, as opposed to 20 percent of them under current rules.

Before the new law, the military norm was a fixed pension for those who stay in uniform 20 years or more -- and nothing for the vast majority who don't.

Now troops will be able to open 401(k)-style accounts, into which amounts equal to 11 percent of their pay may flow each year, partly from their own contributions and partly from government matching funds. Like the ones already available to many private-sector workers, these accounts will be fully portable. Service members can invest the money and carry it along throughout their post-military careers after at least two years in uniform.

Posted by at December 24, 2015 5:35 PM