The President's Advisory Panel on Tax Reform met yesterday in anticipation of their November 1 deadline for submitting tax code recommendations to the Treasury Department. In the meeting the panel referenced some loose conclusions they have come to regarding tax reform, mainly concerning the alternative minimum tax as well as deductions for homeownership and employer-provided health insurance. While the panel still has a few weeks before they will be submitting formal recommendations (which Bush may or may not choose to consider), they have basically come to a consensus that it would be a good idea to cap both the employee income exclusion for employer provided health care as well as the mortgage interest deduction for homeowners. There was discussion of capping employer-provided health insurance at $11,000 per employee, and mortgage interest deduction at $350,000 (for a couple filing jointly). Former GOP Senator and Chairman of the Panel Connie Mack said that the deductions as they currently exist are not shared equally, and that by pursuing caps in both areas it would result in "shifting some of the benefit to middle-income Americans." Much of the reason why the panel is interested in pursuing these reforms is because the decreased deductions would help to offset the cost of repealing the Alternative Minimum Tax (AMT), which was created to ensure that all extremely wealthy individuals would pay some taxes, but is increasingly ensnaring upper- and middle-income Americans. AMT repeal, which would cost about $11.3 trillion over ten years, was deemed to be a necessary reform by the panel months ago, however it was only at yesterday's meeting that they laid out any sort of options to offset to the cost of repeal. At yesterday's meeting the panel also recommended expanding tax breaks for charitable donations, and rejected the idea of replacing the income tax with a sales tax or a value added tax, both of which would unnecessarily complicate the tax code while placing a disproportionate financial burden on low-income families. The panel will meet once more publicly on October 18, and meet later in the month via teleconference before submitting their recommendations. They are slated to disband November 15. New York Times: "Tax Panel Says Popular Breaks Should Be Cut"

Grist Magazine is exploring whether New Orleans is alone in seeing a "toxic gumbo" in the drinking water: Last month, "toxic gumbo" entered the American lexicon with the speed and force of the floodwaters it describes.... "I want to be very clear," cautioned EPA administrator Stephen Johnson, describing the situation in the devastated city to the press. "Emergency response personnel and the public should avoid direct contact with any floodwater."

It appears the House Budget Committee has moved the deadline for budget reconciliation back yet again. After initially postponing the deadline post-Katrina, the committees were slated to get their spending proposals to the Budget Committee the week of Oct. 17, but Chairman Jim Nussle (R-IA) was able to push back the deadline to Oct. 28. The hope for Nussle is that this pushback will give committees an extra week to submit proposals for cutting mandatory spending to the budget panel. The Senate, apparently, will not join the House in this spending bill delay. Nussle has proposed amending the FY 2006 budget resolution to call for across-the-board cuts in discretionary spending. His proposal notably calls for cuts in both defense and homeland security spending, as well as increased cuts in mandatory programs such as Medicare. The calls for increased cuts have been increasing along with Republican restlessness over how to save money to pay for the costs of Katrina recovery. Groups such as the Committee for a Responsible Federal Budget have lauded Nussle and others for their attempts to bring down the deficit by increasing budget cuts, yet are ignoring the fact that these same lawmakers support passing $70 billion worth of deficit-financed tax cuts in reconciliation. The Democratic Senate leadership has taken steps to urge Congressional GOPs that it is more important to deal with immediate needs of hurricane victims and rising energy prices, as opposed to passing another round of tax breaks through reconciliation. Minority leader Reid (D-NV) and a number of other Democratic Senators sent a " target="_blank">letter to Majority leader Frist (R-TN) on Friday, outlining those points.

Yesterday the Coalition on Human Needs sent a sign-on letter to Congress, requesting that lawmakers focus on addressing human needs issues in the wake of the natural disasters, rather than focus on cutting both entitlement spending and taxes. The letter was endorsed by approximately 750 groups; at least one from every state.