Tax Policy -- W&M Approves Extenders; Rejects AMT Patch: By a mostly party-line vote of 25-12, the House Ways and Means Committee approved at $57 billion tax package of an assortment of tax breaks yesterday. The committee also voted down a Republican-offered unpaid-for one-year AMT patch. The bill is expected to be on the House floor next week.

War Supplemental -- House Rejects War Funding Portion of War Sup: Anti-war Democrats voted "no" and 132 protesting Republicans voted "present" to defeat an amendment that would fund war operations in Iraq and Afghanistan to a war funding bill. A domestic spending package was approved along with provisions aimed at changing war policy. The Senate is expected to add war funds when it votes on the bill, probably after the Memorial Day break.

Farm Bill -- House and Senate Pass By Wide Margins: The Senate passed the farm bill reauthorization yesterday by a wide margin: 81-15, well above the 67 needed to override a promised presidential veto of the bill. The House has also passed the bill by much more than needed to override a veto in that chamber. The bill has almost $300 billion in spending over the next five years, with 73 percent of that spending going to people in poverty.

The gas tax holiday proposed by Sens. John McCain (R-AZ) and Hillary Clinton (D-NY) has been universally panned by experts, economists and elitists of all political stripes.

Now comes a novel objection from perhaps the most famous of all pundits, certainly one with a bigger media footprint than all the others who have opined to date.

"The gas tax holiday? It doesn't go far enough!" grouses Stephen Colbert. His argument is neatly laid out in a presentation made to "nation," in Stephen Colbert's Gas Tax Holiday.

Congressional opposition to the Frank housing bill is coalescing around apparently dubious propositions ($).

[Antonia Ferrier, spokeswoman for House Minority Whip Roy Blunt (R-MO)] also took aim at the [Rep. Barney] Frank proposal. "This bill perversely rewards those who borrowed more than they could afford — their monthly mortgage payments get reduced with the government footing the bill. How is that fair to the millions of Americans who worked hard and paid their mortgages on time? And who ends up holding the bag if all goes south? No surprise, the American taxpayer."

Meanwhile, economist and Fed Chief Ben Bernanke provides an "expert" opinion:

"High rates of delinquency and foreclosure can have substantial spillover effects on the housing market, the financial markets and the broader economy," [Federal Reserve Chairman Ben] Bernanke said Monday..."Therefore, doing what we can to avoid preventable foreclosures is not just in the interest of lenders and borrowers. It's in everybody's interest," he said.

...

The current housing crises has clobbered some borrowers home prices dropped. That left them with mortgages that are bigger than the value of their home. When that's the primary problem, Bernanke said the best solution may be reducing the amount that the borrower owes on the loan or some other permanent modification to the loan.

Fine. Helping distressed homeowners can help everyone. But surely we cannot stand in the way of the the almighty market! That would be disaster.

Republican talking points obtained by Roll Call also suggested housing prices must fall further rather than be propped up by a new government program, an argument also made by [Sen. Richard Shelby (R-AL)] Shelby.

"The correction in the housing market is a necessary reaction to a prolonged period of reckless lending and borrowing practices that helped take housing prices to levels that were simply unsustainable. For the market to stabilize, prices will need to return to levels that ordinary Americans can afford," the talking points read.

Or not.

Rising foreclosures add to the glut of unsold homes and that put more downward pressure on prices, aggravating the housing slump, he said. More rapid declines in house prices could have an "adverse impact" on the broader economy and the stability of the financial system, [Bernanke] said.

Photo by Flickr user msabcmom used under a Creative Commons license

If you find an email that looks like this in your inbox, delete it! It is a scam.

We are top officials of the United States Senate Government who are interested in importation of oil into our country with funds that are presently trapped in the FEDERAL TRANSPORTATION TRUST FUND dedicated to improving transportation. We wish to send this money to overseas accounts in the MIDDLE EAST but cannot due to restrictions in Congress Transportation Equity Act requiring that this money must be spent to build roads, bridges and high speed trains.

If you accept we will deliver to your a sum of 30 DOLLARS in the summer 2008 in form of a "GAS TAX HOLIDAY". You will then deliver this money to accounts of our friends in Middle East by taking it to your nearby gasoline station where they have information to forward the money. Please supply your bank account, social security number, address and your vote in DEMOCRATIC PRIMARIES AND NOVEMBER GENERAL ELECTION.

As a follow-up to the comments of Messrs. Mankiw and Berman regarding the notion of suspending the federal gas tax during the summer months, we submit for your consideration the substantiation offered by Sam Stein, Political Reporter at the Huffington Post, for the proposition that Expert Support For Gas Tax Holiday Appears Nonexistent, to wit:

• Tom Friedman of the Times: "so ridiculous...it takes your breath away"
• Jonathan Alter of Newsweek: "Hillary Clinton has now joined John McCain in proposing the most irresponsible policy idea of the year -- an idea that actually could aid the terrorists"
• Jerry Taylor, a fellow for the Cato Institute, called the proposal a "holiday from reality"
• Robert Shapiro, former undersecretary of commerce in the Clinton administration: ""Stated as clearly as I can, it's utterly misguided both environmentally and economically"
• Max Schulz, a senior fellow at the conservative Manhattan Institute: "I think it is close to political pandering. It is bad policy and political gimmickry

This could go on all day. So we close on this note, from Ken Green, an energy expert for the American Enterprise Institute: "I'm afraid that your record is going to be unbroken in terms of finding someone who will like this idea."

The BEA will release 1st quarter GDP figures tomorrow, and the BLS will release employment data on Friday. To be sure, these will be carefully-watched figures as the nation holds its breath waiting to see if we're moving closer to the R-word.

But these are national data, and it becomes easy to overlook the fact that some areas within the nation are currently in throes of economic turmoil. This morning's release of metropolitan employment data reminds us that, regardless of what happens in aggregate, many Americans are already living a recession.

Unemployment rates were higher in March than a year earlier in 309 of the 369 metropolitan areas, lower in 40 areas, and unchanged in 20 areas, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Fourteen areas, 12 of which are located in California, recorded jobless rates of at least 10.0 percent, while 9 areas registered rates below 3.0 percent. The national unemployment rate in March was 5.2 percent, not seasonally adjusted, up from 4.5 percent a year earlier.

In March, 45 metropolitan areas reported unemployment rates of at least 7.0 percent, up from 26 areas a year earlier, while 69 areas recorded rates below 4.0 percent, down from 128 areas in March 2007....Overall, 193 areas recorded unemployment rates below the U.S. figure of 5.2 percent, 163 areas had higher rates, and 13 areas had the same rate.

Stimulus 1.0 -- First Checks Going Out Today: The first of 130 million tax "rebate" checks provided under the first stimulus package signed in February will be going out today, earlier than previously announced. The rebates - up to $600 for an individual, $1,200 for a couple and an additional $300 for each dependent child are the biggest part of $168 billion stimulus. Story.

War Supplemental -- Bill Could Top $200 Bn.: According to BNA ($), the House is mulling a war funding bill that would include the remainder of the president's FY 2008 request ($108 billion), his FY 2009 partial-year request ($70 billion), and some $15 billion in domestic spending that may include an extension of unemployment benefits and increased funding for a childhood nutrition program.

Taxes -- Senate Panels Agree on FAA, Highway Package: Leaders of the Senate Finance and Commerce Committees announced late Friday an agreement on a tax package to boost funding for the Federal Aviation Administration and ensure solvency for the Highway Trust Fund. Among the provisions are a "truth in passenger tax disclosures" provision to prevent airlines from presenting fuel surcharges as government taxes and tax credit bonds for rail infrastructure. The package has not yet been scored. American Infrastructure Investment and Improvement Act.

On Friday, actor Wesley Snipes was sentenced to three years in prison for failing to pay federal income taxes for close to ten years. Snipes could have been sentenced to up to 16 years if he had been convicted of all charges, but he was not convicted of tax fraud and conspiracy back in February. He owes close to $20 million according to the IRS. Snipes maintains he was dupped, but the judge thought otherwise:

But U.S. District Judge William Terrell Hodges said Snipes exhibited a "history of contempt over a period of time" for U.S. tax laws, and granted prosecutors the sentence they requested — one year for each of Snipes' convictions of willfully failing to file a tax return from 1999-2001.