May 10 Sen. Jeff Sessions (R-AL) introduced a bill to repeal the estate tax that would cost considerably more than Sen. Kyl's (R-AZ) version of the bill. Kyl and Bill Nelson (D-FL) introduced a bill (S. 420) earlier this year that would prevent the one-year estate tax repeal slated to take effect in 2010 from sunsetting. In other words, their bill would institute full repeal beginning in 2010. Sessions' bill would repeal the estate tax immediatly, and would also eliminate the step-up in basis for assets of the deceased. Sessions is arguing that immediate repeal would actually increase government revenues; however the Joint Committee on Taxation and the Center on Budget and Policy Priorities have both found that cost of full repeal would be close to $1 trillion over a decade. Senate Democrats, led by Senator Charles Schumer (D-NY), are currently working with the Republican leadership to see if there is an estate tax compromise out there that would garner the support of 60 Senators.

Bill Thomas (R-CA) and the Ways and Means Committee kicked off the first of many committee hearings on Social Security today. The Committee will hear from a number of witnesses, including senior fellow Jason Furman of the Center on Budget and Policy Priorities; Eugene Steuerle, a senior fellow at the Urban Institute; Michael Tanner, director of the Cato Institute's Project on Social Security Choice; Robert Pozen, and former economic advisor to President Bush, Lawrence Lindsey. The Ways and Means Subcommittee on Social Security, which is chaired by Rep. Jim McCrery (R-LA), will hold the next hearing on May 17th. House Reps remain split on how to proceed with Social Security legislation. Chairman of the House Rules Committee, Rep. Mike Pence (R-IN), said yesterday, "Let's get on with it. Let the House lead on Social Security reform. If the House goes first, we will produce a reform that is consistent with the President's vision for a 21st Century public retirement system." A number of other House members remain skeptical however, raising concerns that it may be risky to pass legislation without knowing it would have Senate support. Thomas met last night with Sen. Ben Nelson (D-NE) one-on-one to discuss his ideas for shoring up Social Security. Nelson noted Thomas is promoting "fundamental changes that [are] broader than Social Security." Thomas discussed some specifics regarding his ideas in an April 29 press conference. A recent CBPP report discusses the details mentioned by Thomas, and highlights the fact that Thomas may be looking to use Social Security legislation as a means to push for more tax breaks for the wealthy. The report can be read here.

Congress recently approved a budget resolution, and now it is up to Senate and House appropriators to write spending bills funding discretionary programs (both defense and domestic). At the same time, other authorizing committees will be working to "find savings" from mandatory programs, as this budget resolution contains reconciliation instructions requiring severe reductions in mandatory spending. The Coalition on Human Needs has put together a good two-page memo outlining what is in the budget resolution and how it will affect specific mandatory programs. Also see a recent Watcher article for for more information on the budget resolution.