On April 14th, the day before tax day, the Senate Finance Committee held a hearing on the tax gap where they discussed compliance issues, tax code complexity, and the amount of revenue that is lost each year due to people and corporations who don't pay 100 percent of their taxes. Witnesses included GAO Comptroller David Walker, IRS Commissioner Mark Everson, Cheif of Staff of the Joint Committee on Taxation George Yin, and National Taxpayer Advocate Nina Olson. All Committee member and witness statements can be read here. Read this Washington Post article for more info on the tax gap and compliance issues, and look for an article in next week's edition of the Watcher for more detailed coverage.

While the House has yet to name conferees to the conference committee for the budget resolution - a sign that final compromises have not yet been reached - 44 House Republicans have sent a letter to House Budget Chairman Jim Nussle (IA) urging the reinstatement of $20 billion to the Medicaid program in the budget resolution. The position of those House Republicans may make it even more difficult for any cuts in spending to the Medicaid program this year through reconciliation instructions. The Senate stripped instructions for $20 billion in savings from the program before passing their budget resolution. However, if the House GOP leadership is willing to relent on Medicaid funding, it may increase the changes of a compromise on a final budget resolution. Congress has failed to pass a budget resolution in two out of the last three years. Read more about the budget resolutions passed by the House and Senate in March

On Wednesday the House is slated to vote on H.R. 8, a bill to repeal the estate tax. The House has passed this bill in years past, and will most likely pass it again. The cost of repealing the estate tax over a ten year period would come out to be $745 billion. Click here for more information on repeal costs. President Bush is busy ranting that we don't have enough money to continue Social Security payments as they are, and at the same time Congress is set to pass an extremely austere budget resolution for FY 2006 that cuts billions of dollars from funding for social programs. Yet this push to further gut national coffers and appeal to the interests of the wealthiest in our country exists as a very real threat. The Washington Post has published two insightful columns this week discussing the issue of the estate tax and how it fits into the larger tax and budget picture. Click below to read the articles.

The Rich Get Richer

The Paris Hilton Tax Cut

Next week Sen. John Sununu (R-NH) and Rep. Paul Ryan (R-WI) plan to reintroduce their bill on Social Security reform in Congress. Their bill includes payroll tax-financed individual accounts. Sen. Lindsey Graham (R-SC) is also moving ahead with work on his Social Security legislation. His bill will also include payroll tax-financed individual investment accounts, but unlike other GOP bills, will most likely propose to raise the retirement age for benefit eligibility. He is considering the age of 68 as of right now (the current retirement age is 67). Graham is also exploring various approaches to "progressive price indexing," an idea which is touted by in Robert Pozen's Social Security reform proposal. Pozen, a Democrat, was a member of Bush's 2001 Social Security commission. His plan, which is getting increasing favorable attention from President Bush, would protect the lowest-income seniors by keeping them under wage indexing but would gradually blend in price indexing until the seniors at the upper end of the income scale would be subject to full price indexing.