Federal Budget & Tax

Federal Budget & Tax: News Blog Background

Wednesday, March 19, 2008

Baucus Continues Quest to Drive Up Deficits

Sen. Max Baucus (D-MT), Chairman of the Senate Finance Committee, reiterated yesterday that the one-year adjustment to prevent the Alternative Minimum Tax (AMT) from impacting millions of additional taxpayers this year will not be paid for - ensuring an additional $70 billion will be added to the deficit. Depsite the decision by House leaders to include a special provision in their version of the budget resolution (called "reconciliation instructions") that would protect a paid-for patch from being filibustered in the Senate, Baucus and other Senate leaders (including Senate Budget Committee Chairman and all-around good guy Kent Conrad (D-ND)) seem to not even want to try to pay for the AMT. BNA reports ($):

Many Senate Republicans expressed opposition to the reconciliation instructions, saying they were meant to bully the Senate into accepting a paid-for patch.

But Senate Finance Committee Chairman Max Baucus (D-Mont.) told BNA late March 13 that while he believes reconciliation instructions will be in the final resolution, he does not believe Congress will pay for the patch because like in 2007, while he would prefer it to be offset, that is not the will of the Senate.

"I don't think we'll pay for it," Baucus said in between votes on the Senate floor. "AMT is not going to be paid for. Everybody wants to do an AMT patch and AMT will not be paid for."

What's the point of being in the majority if Democrats are not going to get serious about one of their main priorities - fiscal responsibility? Can't they at least try?

Image by Flickr user stgermh used under a Creative Commons license

Posted by Adam Hughes, 08:36:27 AM

Friday, March 14, 2008

Democrats Pass Budget in House & Senate

The House and Senate successfully passed their versions of the FY 2009 budget resolution yesterday. The House passed their spending outline on a mostly party-line vote 212 - 207 and the Senate passed their version early this morning 51 - 44 (roll call not available yet). Sixteen Democrats in the House opposed the budget along with all Republicans and in the Senate, Sens. Olympia Snowe (R-ME) and Susan Collins (R-ME) supported the budget, while Sen. Evan Bayh (D-IN) opposed it.

The House and Senate versions are similar in a number of areas, but the House blueprint is more fiscally responsible - strictly adhering to PAYGO rules by requiring offsets for mandatory spending increases and any additional tax cuts - particularly offsetting changes to the alternative minimum tax. Way to go House of Representatives!

There were tons of amendments in the Senate all through the day and night on key fiscal issues. We'll be dissecting the amendments and votes throughout the day today here on the BudgetBlog. Stay tuned!

Posted by Adam Hughes, 09:25:16 AM

Thursday, March 13, 2008

Estate Tax Madness

The Senate has officially gone over the the bad place. Three out of the first seven amendments to the FY 2009 budget resolution propose to make costly changes to the estate tax. While only one of them was adopted, unfortunately the breakdown of the votes showed less support for a rational, fiscally responsible reform to the estate tax.

Here's a quick summary of the amendments:

Sen. Max Baucus' (D-MT) amendment to use projected surpluses in 2012 and 2013 to extend popular middle-class tax cuts and make changes to the estate tax by extending the 2009 levels ($7 million exemption for a couple, 45 percent marginal rate) passed overwhelmingly 99 - 1.
Sen. Ken Salazar (D-CO) offered an amendment that would have likely increased the exemptions for the estate tax to $10 million per couple and drop the marginal tax rate to 35 percent. This amendment failed 38-62, but garnered 15 more votes from Democrats who, quite frankly, should know better, than it did last year when a simliar amendment was offered by Sen. Ben Nelson (D-NE), which received 25 votes.
Sen. Jon Kyl (R-AZ) offered an amendment that would make similar changes in the exemption levels and marginal tax rates as Salazar's amendment, but would not offset the tremendous cost of such an amendment - likely around $750 billion over the next ten years according to the Joint Committee on Taxation. Kyl's amendment failed by a 50-50 vote.

Posted by Adam Hughes, 02:29:29 PM

Thursday, March 06, 2008

DAILY FISCAL POLICY REPORT -- Mar. 6, 2008

The House budget resolution, legislation and statements

Legislation

Statements

The Senate budget resolution, legislation and statements

Legislation

Statements

Taxes -- House Appropriations Financial Services Subcommittee Chairman Jose Serrano (D-NY) and committee member Rep. Maurice Hinchey (D-NY) will continue their efforts to kill the IRS private tax collection program through fiscal 2009 appropriations.

Contracting -- Sen. John McCain's (R-AZ) role in killing an Air Force deal with Boeing several years ago resurfaces as the row over the Air Forces's decision to contract with Airbus's parent, EADS, for a fleet of new tanker planes

Posted by Craig Jennings, 09:51:43 AM

Monday, March 03, 2008

The $3 Trillion War

Testifying before the Joint Economic Committee on Thursday, Nobel Laureate economist Joseph Stiglitz said that the wars in Iraq and Afghanistan could cost more than $3 trillion.

Stiglitz's testimony is based on research that was released as a book, The Three Trillion Dollar War, on Friday. Coauthored with Harvard University professor Linda Bilmes, the book estimates that when interest expenses on the deficit spending used to finance the war and other costs, like health care benefits for wounded veterans, are calculated, the wars' costs could range from $5 to $7 trillion.

McClatchy:

In an interview, Stiglitz said that too much of the public debate had been over the wars' operational costs while the real budget strains would show up only years from now.

"The peak expenditures are way out," he said, noting that the peak expenditures for World War II vets came in 1993.

The pair estimated that future medical, disability and Social Security costs for veterans of the conflicts in Iraq and Afghanistan range from a best-case $422 billion to what they call a more probable long-term expense of $717 billion.