Sen. Nelson to Cosponsor Estate Tax Repeal Legislation

According to the news source Congress Daily, advocates of estate tax repeal have enlisted the help of Senator Bill Nelson (D-FL), to provide support for their stance on this issue. Nelson will be the Democratic cosponser of a bill aimed at repeal, along with Senator Kyl (R-AZ), who has sponsored pro-repeal measures in the past. The estate tax is a progressive tax that affects the wealthiest 2 percent of the population in America. It is currently scheduled to phase out through 2009, not exist in 2010, and then return in 2011. The estate tax provides an important source of revenue; if repealed the government would lose almost a trillion dollars in revenue over the next twenty years. Bill Nelson is one of seven democratic Senators who has voted in favor of repeal in the past. The others are Baucus (MT), Bayh (IN), Landrieu (LA), Lincoln (AR), Ben Nelson (NE), and Wyden (OR). While these Senators did vote for repeal in 2001, the fiscal health of our country is different today than it was four years ago. The CBO recently projected the budget deficit in 2005 to be around $427 billion. Our economy is not conducive right now to policies that will gut revenue even more. The above-listed Senators who have voted for repeal in the past need to recognize that our economy cannot handle an even larger squeeze on the budget right now. Voting to cut that much federal revenue annually would be irresponsible in a time when we are already expecting to see very limited domestic discretionary spending, as well as the extension of Bush's first term tax cuts. Repealing the estate tax would further cut taxes for the wealthiest individuals in this country, and make it more difficult for the government to be able to fully fund social programs that a large percentage of the population rely on to get by.

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Bush Courts Black Evangelicals with Faith Based Intiative

Interesting article on Bush's efforts with Black evangelical churches and the effect of faith-based money.

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White House wants to cut government at the knees

The White House announced that the FY 2006 budget will include two proposals for dramatic overhauls of government oversight that would become the Gatling gun for destroying federal programs that protect the public health, safety, civil rights, and environment.
  • One proposal would create a Sunset Commission to review program performance. As a Congress Daily AM article elaborates, the proposal would also force all government programs to cease serving the public after ten years, unless Congress affirmatively votes to keep the program alive.

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Industry Challenge Prompts Removal of EPA Database

The Environmental Protection Agency (EPA) has removed one database from its public website and slightly altered another due to a Data Quality Act (DQA) challenge submitted by the U.S. Chamber of Commerce. The Chamber submitted the request May 26, 2004, asserting that physical and chemical property information in several EPA databases was erroneous because the data was inconsistent and contradictory between the different databases. The differing information leads to vastly different cleanup cost estimates for contaminated sites, according to the Chamber.

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Chile's Pension Plan

President Bush has stated in the past that the United States could "take some lessons from Chile, particularly when it comes to how to run our pension plans." Chile's retirement insurance program has gotten attention lately because the reforms enacted in the country a little over twenty years ago share many similarities with reform plans being discussed by U.S. Republican leaders today. The major similarity is that Chilean workers pay a percentage (roughly 10 percent) of their salaries into private investment accounts. This system was put in place with the thought that these accounts would spur economic growth as well as provide monthly pension benefits larger than what the traditional system could offer. Two major differences, however, include the fact that Chile's private pension system is not currently optional, and also, according to this article in the New York Times, the country "was careful before it started its private system to accumulate several years of budget surpluses." The U.S., unlike Chile, is considering a social security reform in the midst of multiple consecutive years of budget deficits. The New York Times article provides a good description of how Chileans have fared under this system. As the first group of workers to depend on this system begin to retire, it is becoming evident that benefits are falling short of what was originally advertised when the program was put into place, and will unfortunately plunge many once-comfortable retirees into poverty. Not only that, but the Chilean government has had to continue diverting billions of dollars into a safety net for workers whose monthly contributions were not large enough to ensure a minimum pension. While the Chilean and U.S. economies and workforces are different and thus will benefit differently with private pension plans, it helps to look at the problems Chileans are experiencing with their private accounts if we are going to be considering enacting similar policies.

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The Truth Behind CBO's Ten Year Deficit Projections

In September of 2004 the Congressional Budget Office (CBO) estimated 10 year deficit levels to be $2.3 trillion. Their recent Budget and Economic Outlook shows this 10 year deficit projection improving, as they now predict deficit levels to be $1.4 trillion over the next ten years. These numbers are misleading. The reason for this improvement is because in their previous report, the CBO included $115 billion per year through 2014 for supplemental defense expenditures in Iraq and Afghanistan. In their current estimates, the CBO includes no supplemental funding for Iraq and Afghanistan. This discrepancy exists because CBO is required by law to base their projections only on current law. The CBO report acknowledges this and includes adjustments to their previous projections in order to have a fair baseline to compare the ten year deficit. When this adjustment is made, CBO reports that ten year deficit levels will actually increase by half a trillion dollars, or 0.3 percent of GDP; three-quarters of this increase is due to legislation surrounding the extension of tax cuts. Similarly, CBO projections fail to take into account some costly policies that are widely expected to become law in the near future. These include:
  • reforming the Alternative Minimum Tax;
  • extending expiring tax cuts; and
  • creating private accounts in social security. Given the potential costs of the policy issues listed above, as well as projected increases in health care costs, it would be foolish and irresponsible for policymakers to think they can sufficiently meet those priorities while attempting to make Bush's tax cuts permanent. To do so would explode deficits far beyond any projections we are seeing today. For good articles on the Budget and Economic Outlook released yesterday, read this article in the Washington Post and this article from Bloomberg news. To read more about why CBO projections tend to underestimate the real picture of the deficit read this analysis by economist John Irons. Written last fall, Dr. Irons explains his take on why ten year budget deficits will most likely be much greater than any predictions from the CBO.
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    Crisis for workers in meatpacking plants

    Human Rights Watch is reporting workplace health and safety violations and abuses of worker rights in the meatpacking industry so severe that they constitute breaches of global human rights standards. From their announcement: Workers in the U.S. meat and poultry industry endure unnecessarily hazardous work conditions, and the companies employing them often use illegal tactics to crush union organizing efforts, Human Rights Watch said in a new report released today.

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    Big Words, Empty Pockets

    On the Center for American Progress' website, there is a letter to Congress signed by over 60 religious leaders from 16 states. The letter calls on Congress to examine the budget as an inherently moral document and offers six specific questions that should be asked to determine whether the budget's provisions are fair, just and promote the common good. This is a critical issue at a time when President Bush's new budget calls for a slashing of social service programs, many of them the same faith-based programs that he advocated for during the election.

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    Frist Names CARE Act on Top Ten Legislative Agenda

    Sen. Bill Frist released his "Top Ten" Legislative Goals for the 108th Congress. Looks like the CARE Act is in the spotlight again. Click here for Frist's Top Ten list. You can get the .pdf with the decription of the proposed language on Sen. Frist's site.

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    Appointment News

    • David Safavian will be the new chief for government-wide procurement policy.
    • Michael Powell is stepping down as chairman of the Federal Communications Commission in March.
    • Anna Escobedo Cabral, former aide to Sen. Orrin Hatch, has been sworn in at the U.S. treasurer, succeeding Rosario Marin.
    • Department of Homeland Security Undersecretary for Border and Transportation Security Asa Hutchinson announced his resignation Jan. 24 to "pursue other responsibilities."

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