Jeff Bingaman United States Senator from New Mexico

WASHINGTON – The Senate Finance Committee took a first step toward congressional passage of an economic recovery package U.S. Senator Jeff Bingaman helped craft.

The committee, of which Bingaman is a senior member and subcommittee chairman, late Tuesday approved a package of tax incentives and tax cuts that are designed to stimulate the economy. The measure also acknowledges the growing uninsured problem by expanding Medicaid payments to states. 

Bingaman helped write several tax incentive proposals in the bill, as well as two key health care provisions that would help New Mexico. 

The first health care-related provision Bingaman fought for will provide at least $500 million in increased Medicaid dollars to New Mexico. The increase in federal funding will protect coverage for low-income New Mexicans as well as free up state funding for additional health care coverage and other state priorities. Bingaman championed efforts to make sure that the formula that allocates this funding does not disadvantage smaller states like New Mexico. 

Bingaman also wrote a provision that will provide an increase in funding for uninsured and low-income New Mexicans through the Medicaid Disproportionate Share Hospital program – a fund that pays hospitals for care they give to uninsured patients. 

Bingaman also was able to include the following job-growth provisions in the bill:

• A credit that will allow companies, such as Schott, Advent Solar, Emcore and Nanopore, to write off 30 percent of the cost of investing in facilities to manufacture renewable energy technologies, like solar panels. Until now, all of our domestic tax incentives have focused exclusively on consumer tax credits to encourage the use of such technology as solar panels. This measure for the first time incentivizes companies to manufacture green technology in the United States.
• A provision that enhances the Research & Development tax credit, equal to 20 percent of R&D expenditures, for expenditures related to renewable energy technologies – including fuel cells, battery technology, renewable energy, energy conservation technology, efficient transmission and distribution of electricity, and carbon capture and sequestration.
• A plan to stimulate the demand for municipal bonds – and thus enable communities to obtain the financing they need to make infrastructure improvements – by allowing banks to acquire additional tax-exempt debt. Currently, banks can invest only up to $10 million, but this amount often does not meet communities' capital needs to maintain roads and construct schools. Bingaman's proposal will raise the bond limit to $30 million and create a "safe harbor" that enables banks to invest up to two percent of their assets in municipal debt. Taken together, the moves will make it possible for states and municipalities to borrow at a lower-interest rate at a time when capital is tight. 

"Already this week, at least 45,000 American workers have been laid off. I agree with President Obama that we have to act now to fix the economy," Bingaman said. "The package Congress is writing will combine tax cuts for workers, tax incentives for companies, and a direct investment in our economy."

"I am particularly pleased that this stimulus package will focus on job creation through the shift to green energy technology. To that end, I was pleased to add a tax credit that makes the U.S. manufacture of solar, wind, battery and other technology more cost effective. In the coming years we'll be using a lot more renewable energy. I want to be sure we're not only developing and using this technology here in New Mexico, but that we're manufacturing it here, too," he added.

Bingaman said his bond provision will help create jobs in New Mexico while helping communities with their important infrastructure projects.

"By increasing demand for municipal debt, communities across New Mexico will get the affordable financing they need to build schools, repair roads, and expand hospitals," Bingaman said. "This is a double victory: communities benefit from long-term infrastructure improvements while the economy gets a strong shot in the arm."

Also in the Finance Committee's package is a provision Bingaman supported to improve tax exemptions for employer-provided mass transit subsidies. Under current law, employees can only receive $120 of tax excluded subsidies per month to put toward the cost of mass transit, but they can receive $230 in subsidies per month toward a parking space. The bill brings puts both mass transit subsidies and park subsidies as $230 monthly.

"This proposal will put New Mexicans who commute by mass transit on equal footing with those who receive parking from their employers," said Bingaman. "This is a win for all New Mexicans. The thousands who ride Rail Runner each day can now obtain higher benefits from their employers without being subject to additional tax.  And by promoting mass transit, we decrease traffic congestion and reduce pollution."

Also Tuesday, the Senate Appropriations Committee voted on a piece of the economic recovery plan that will be merged with the Senate Finance Committee's plan.