The First BR Amendment -- Substance and Strategy

The opening salvo in the Senate budget resolution amendment process will be fired in the next hour or two, when Finance Committee Chair Sen. Max Baucus (D-MT) offers the first amendment in this year's round. The Baucus amendment creates room in the budget numbers to extend some of the temporary 2001 and 2003 tax cuts dealing with
  • the marriage penalty
  • the child tax credit
  • the 10 percent tax bracket
  • the estate tax (understood to mean extending the 2009 levels, with indexation)

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JCT Report on Alternative Estate Tax Systems

In advance of tomorrow's Senate Finance Committee hearing, Alternatives to the Current Federal Estate Tax System, the Joint Committee on Taxation has issued a report at once broad and brief, "Description and Analysis of Alternative Wealth Transfer Tax Systems," (JCX-22-08), March 10, 2008. The report, which explores tax policy relating to various approaches to intergenerational wealth transfer, is detailed without being overly technical, is worthwhile reading for anyone interested in estate, inheritance, and gift tax systems. See: Report.

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"Contractor" Classification Worth Over $190 Billion to Blackwater

The Boston Globe: In letters to the Internal Revenue Service, the Small Business Administration, and the Labor Department, [House Oversight Committee Chairman Henry] Waxman, Democrat of California, questioned Blackwater's classification of its workers as independent contractors instead of employees. That designation, which the government has questioned in the past, allowed the company to obtain $144 million in contracts set aside for small businesses and avoid paying as much as $50 million in withholding taxes under State Department contracts, he said.

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DAILY FISCAL POLICY REPORT -- Mar. 11, 2008

Budget Resolution (BR):
  • Senate -- Counting Votes: With close votes anticipated on tax amendments -- and on the resolution itself -- a key question is whether the absence of Sens. Clinton and Obama (campaigning) and Byrd (hospitalized) for part or all of the week will deprive Democrats of their working majority on BR votes... Senate Budget Chair Conrad: "Let's do the math. 51-49. We're down two, plus Sen. Byrd. 49-48."

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House Budget Debate: a Mere Moment of Mirth

During the House Budget panel's mark-up of the budget resolution last week, presidential politics were the backdrop for some frivolity and hijinks. Rep. Rodney Alexander (R-IA) displayed a surprsing degree of pessimism regarding his party's prospects for the presidential elections in the fall, offering amendments to include in the resolution's deficits projections the costs of the health care plans of candidates Sen. Hillary Clinton and Sen. Barack Obama.

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Private Sector Bleeding Jobs Since December

Friday's job figures - a 63,000 job loss - are further evidence that the economy is taking a downward turn, but the private sector has been cutting jobs since December. The real story, however, is in the private sector, which took a 101,000 job hit in January. (click to enlarge)

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DAILY FISCAL POLICY REPORT -- Mar. 10, 2008

Budget -- Front and Center: Floor debates, amendments, vote-a-rama, and final votes on the FY09 budget resolution will occupy most of the House and Senate agenda this week. A central issue: taxes, especially the AMT and whether a patch for next year should be paid for. An amendment to watch for, mostly in the Senate: Sen. Jim DeMint's (R-SC) proposal to ban earmark projects for one year. (For House and Senate budget resolutions, see here.)

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The Largest Tax Exaggeration in History

Can We Kindly Declare a Moratorium on This Canard? Once again, the claim is heard that the budget resolution calls for "the largest tax increase in history." And it is as false a claim as ever. Current law calls for the Bush tax cuts of 2001 and 2003 to expire in 2010. Under the law, the tax rates that prevailed prior to those years will be restored, resulting in a tax increase, which by some measure would be the largest in history.

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GAO Report Highlights Troubling Trend in Supplemental Spending

A report recently released by the GAO indicates that with rising rates of supplemental appropriations comes decreasing budgeting transparency. Looking at supplemental requests - emergency and non-emergency - from 1997 to 2006, the report concludes:
To the extent possible, funds should be provided through the regular appropriations process to ensure that trade-offs are made among competing priorities, especially in an environment of increasingly constrained resources.

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Earmark Moratorium: Fiscal Fetishism?

"Tragicomic" Obsession Giving Rise to Political Cannibalism With the budget resolution action for the week behind us, we are free to turn to attention again to an issue which for two years now has generated discussion and debate so disproportionate to its actual budgetary significance than it's possible we've moved over from mere obsession into the realm of fiscal fetishism: earmarks.

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