‘Line’ Items: Fall Edition
Falling Into Pieces – Fall officially begins this week. A short congressional calendar and the quickly-approaching elections mean that the legislative agenda will largely fall by the wayside. Only a few bills will get passed this month, with a post-election lame duck session set to rake up with the rest.
Leaving Tough Tax Cut Decisions Until Later – The tax cut debate is turning about as much as the leaves soon will. Last week Senate Minority Leader Mitch McConnell (R-KY) introduce a proposal, the Tax Hike Prevention Act of 2010, to permanently extend all the 2001/2003 tax cuts for all tax brackets. It will also permanently extend Alternative Minimum Tax relief to middle class families and permanently set the estate tax at a 35% rate with a $5 million exemption for individuals. Meanwhile, Senate Finance Committee Chairman Max Baucus (D-MT) is drafting a proposal that will permanently extend the tax cuts for families making less than $250,000 (as the White House proposed) and also permanently extend the estate tax, possibly at the 2009 rate of 45% with a $3.5 million exclusion. Neither of the tax plans are paid for; CRFB has been adamant that any tax extension be paid for over the longer term. House Democrats were briefed last week by a pollster who told them that deficit reduction should be a key part of their tax message. Although Senate Majority Leader Harry Reid (D-NV) has promised a debate on renewing the tax cuts this month, it is doubtful there will be votes ahead of the election on the politically-charged issue. Some Senators, like, George Voinovich (R-OH) and Ron Wyden (D-OR), who has co-sponsored a tax reform plan of his own, are calling for a larger debate on fundamental tax reform. Such a debate certainly is needed.
Small Biz Aid Falls to the House – The Senate passed H.R. 5297, the Small Business Jobs Act, last week. The House is expected to accept the Senate version this week in order to speed its way to the White House for enactment ahead of the election.
Tax Extenders Fallout – The never-ending “tax extenders” debate may once again sprout up as Senator Baucus last week introduced legislation that extends many of the tax breaks, such as the research and development tax credit, that have so far been unable to clear Congress.
Will CR Bring a Harvest of Add-ons? – Action on FY 2011 appropriations bills has come to a stop, meaning that a continuing resolution (CR) will be required by October 1, the beginning of the fiscal year, in order to keep government functioning. Must-pass legislation such as this often attracts other bills along for the ride. This could set up a showdown over the unrelated add-ons with threats of a government shutdown.