On June 28, the day Congress is planning to leave for the July 4 recess, Treasury Secretary Paul O’Neill has warned that the government will run out of money to pay its bills unless Congress increases the limit on how much the Treasury can borrow. This means parts of government, if not all of it, will no longer properly function, and government will default on its bills. This has been publicly described as a showdown between the Bush administration and Congress, but in fact it is really a showdown between Bush and the Republicans in the House.

With the expiration of key Senate budget rules on October 1, tax cuts will get easier to pass.

The final vote this evening (June 12) on the Gramm amendment for permanent estate tax repeal was 54 for permanent repeal and 44 against -- clearly failing the 60-vote requirement. This represents a resounding victory against permanent repeal of the estate tax. Votes on the two Democratic reform amendments showed that there is a lot of support for reform, and means that we now need to move forward to talk about what a fair and reasonable reform would be. (The Dorgan amendment was 44 for and 54 against; Conrad amendment was 38 for and 60 against) (To be precise, these all were procedurally votes on waiving the budget rules to allow votes on the amendments--but effectively they were votes on the substance of the amendments.) Please check www.fairestatetax.org for updates this week.