Congress Daily reported this afternoon that despite the devastation with this week's hurricane and flooding, Majority Leader Bill Frist (R-TN) plans to go ahead with the Congressional schedule as previously planned, which means that there will be a vote on the estate tax on Tuesday. According to Congress Daily, Frist rejected a request from Minority Leader Harry Reid (D-NV) to suspend work on the tax bill. The Senate will, therefore, move forward with their vote to repeal the estate tax. Repeal of the estate tax would gut levels of federal revenue and would hurt charities by taking away an incentive for people to give. It seems as though in a time of national devastation -- as we are experiencing right now -- it is awfully bold of Frist and Congressional leaders to move ahead with legislation that would take more money away from federal coffers (which is used to invest in national infrastructure), and instead make a move to further pad the pockets of the wealthy. Disgraceful. Sen. Baucus (D-MT), who has been the Democrats' key negotiator on the estate tax, issued the following statement regarding the vote: “I am supportive of working on repealing the estate tax, but now is not the appropriate time. The nation is calling out for the Senate to act to help those in need. We have passed an emergency spending bill, but the emergency has not subsided. People are still homeless. New Orleans is still buried in dark water. Our work is not finished. Instead of moving to the estate tax when the Senate is back in session, I encourage my colleagues to concentrate on the victims left in Hurricane Katrina’s wake.”

Congress is more likely to act on pension reform than social security reform this year, according to today's BNA: "Congress ultimately may fail to find accord on Social Security reforms and instead pass more targeted pension reform legislation when it returns from its summer recess, sources who follow the issue told BNA Aug. 31." Michael Tanner, director of the Cato Institute's Project on Social Security Choice, told BNA Aug. 31 that Congress is likely to pass a pension bill, even if it fails to muster support for Social Security changes. "You could get a decent pension bill regardless of what happens with Social Security," Tanner said. Jason Furman, a senior fellow with the Center on Budget and Policy Priorities, rarely agrees with Tanner, a proponent of Social Security payroll tax-financed individual investment accounts. But Furman also said he expected Congress to act on pensions. "Something on the defined benefit [pension plan] side has to happen," Furman told BNA Aug. 31. Furman said he anticipated that Congress would feel compelled to pass provisions aimed at strengthening the funding of defined benefit pension plans and measures aimed at bolstering the federal pension insurer, the Pension Benefit Guaranty Corporation. "On Social Security, it is extremely unlikely that anything will be enacted by Congress. What the Republicans are trying to do is retreat from this issue," Furman said.

With Congress in recess for the month of August, it seems appropriate to sit back and prepare for what surely will be an action-packed fall in Washington, DC. The Senate, in particular, has more than a full plate for September and October with the Supreme Court nomination of John Roberts, the reauthorization of the Higher Education Act, two reconciliation bills, and more than half (7) of the appropriations bills to finish. The appropriations wrap up this year promises to be particularly dreadful, causing headaches for politicians, congressional staff, and analysts alike. This is because earlier this year, the House and Senate Appropriations Committees reorganized. In a startling display of ignorance and lack of foresight, they choose to reorganize in an inconsistent and uncoordinated way. The result is a different number of appropriations bills in the House and Senate (11 in the House and 12 in the Senate) and a committee structure that does not easily compare between the two chambers (There are only 6 appropriations bills this year with identical jurisdictions). This will cause much chaos in attempts to form and staff conference committees for the remaining 6 bills with no identical counterpart and much confusion for outside analysts and observers in attempt to track appropriations for different programs across committee jurisdictions. It will almost surely lead to delays and drag out the conference committee process at a time when Congress can least afford to waste time. Because of this incongruence and also because the Senate is woefully behind in their appropriations work with little hope of catching up, it appears Congress is headed for another round of unending, short-term continuing resolutions, and most likely another extremely large omnibus appropriations bill. As we have previously observed, omnibus appropriations bills are bad policy:

Omnibus bills are bad legislative practice: they remove transparency and accountability from the appropriations process and usually lead to fiscal irresponsibility. The bills are massive, with plenty of cover to hide extra spending, legislative changes, and special interest items that end up making the bill more fiscally irresponsible than if the bills where passed separately. Removing transparency and accountability from the process by which Congress allocates government funds, especially for other members of Congress, is troubling.- OMB Watcher June 27, 2005

The August rumor mill is in full swing in Washington, DC, and the latest news is that Senate Finance Committee Chairman Chuck Grassley (R-IA) is considering finding the required $10 billion in cuts from programs under his jurisdiction from outside the Medicaid program. The Finance committee must create a reconciliation bill cutting $10 billion from mandatory programs and send it to the Budget committe by September 16. This is one of the main parts of the overall $34.7 billion reconciliation bill cutting entitlement programs agreed to earlier this year in the budget resolution. The reconciliation instructions do not specify to which programs the cuts must be made, but it was generally understood that Medicaid would receive the majority if not all of the $10 billion in cuts. Yet two Republicans on the committee - Senators Gordon Smith (OR) and Olympia Snowe (ME) - are promoting a plan to reduce the Medicaid cuts by as much as half and making the rest of the required cuts to the Medicare program. Some observers are worried such an action would open a pandora's box - allowing both Democrats and Republicans to offer amendments targeting the controversial Medicare prescription drug benefit.