In creating the budget blueprint for FY 2006, many members of Congress are looking to extend the dividend and capital gains tax cuts, which are slated to expire in 2008. The high costs of these tax provisions will add to our already record-level deficits and have negative long-term economic consequences. Economists at the Congressional Research Service and the Brookings Institution have concluded that extending these tax cuts would add to deficit levels and in fact cancel out many positive effects proponents of the tax cuts state they will have. Click here for more information. While the administration and many Congressional GOP leaders are pushing to extend the dividend and capital gains tax cuts, they continue to ignore a tax problem that is increasingly affecting middle class tax payers: the alternative minimum tax. The alternative minimum tax was originally created to prevent very wealthy people from exploiting tax loopholes and not paying their fair share. However, because the tax is not adjusted for inflation and because it applies mainly to people whose income tax bills are low relative to their income, it is affecting more and more people every year. By 2010 it is estimated that people who make under $100,000 and owe the tax will pay an additional $1,321 in federal income taxes, while alternative tax payers who make between $100,000 and $200,000 will owe an additional $2,592. As an editorial in today's New York Times points out, by 2010, the Bush tax cuts alone will cause an additional 17 million taxpayers to owe the alternative tax. By 2014, "assuming the Bush tax cuts are made permanent, 40 million taxpayers will owe the alternative tax, nearly half of whom would never have faced it but for the tax cuts." While Bush and many members of Congress push to cut taxes for the wealthy by extending the dividend and capital gains tax cuts, they are effectively raising taxes on the middle class. Click here to read the editorial. Click here for another good column from the National Journal on why Bush's proposed tax cuts are unnecessary given the current economic environment.

Interesting article from Common Dreams that talks about the different types of groups that are organizing protests against the war currently waging in Iraq.

The Senate Chairman’s Mark, which was passed by the Senate Budget Committee 12-10 (a party line vote), proposes spending $2.56 trillion in FY 2006 and $13.8 billion total over the next five years. Despite these levels, the Chairman’s Mark would cut spending for domestic discretionary programs by approximately $207 billion over five years, adjusted for inflation. In 2010 alone, the Center on Budget and Policy Priorities estimates, funding for domestic discretionary programs would be cut by 13 percent. Like the House Committee’s Mark, the Senate version claims that lowering this spending over five years will succeed in halving the deficit. The spending guidelines laid out in the Senate proposal claim to produce a $208 billion deficit in 2010. Unlike the House markup, the Senate proposal includes caps for discretionary spending for 2006, 2007, and 2008. These caps would lock in cuts for spending through 2008, and would prove to be extremely harmful for programs already on the chopping block. The Senate Mark falls in line with the President’s request and proposes allocating $439 billion for defense and $404.5 billion for non-defense programs. Overall, this amounts to a 2.1 percent increase in spending. The Mark also proposes cuts in mandatory spending of $38 billion over five years. The Senate Finance Committee must make cuts of $15 billion over a five year period, so large cuts to Medicaid are likely. Like the House budget blueprint, the Senate version will go to the floor sometime next week for 50 hours of debate, likely followed by final passage. Senate debate begins on Monday, at which point there will be a series of tough amendments offered by Senators on topics such as farm payments, budget enforcement rules and oil drilling in the Arctic National Wildlife Refuge. Senator Feingold (D-WI), will most likely offer an amendment to create Pay-go rules requiring offsets for new tax cuts or entitlement spending. Under the Senate Chairman’s Mark, roughly $70 billion in tax cuts for the next five years would not require offsets.

Wednesday was a big day for OIRA: the office released both the final selections from the industry-nominated hit list and this year's annual draft report on the costs and benefits of regulations. Hit List: What the White House released is a selection of 76 out of the original 189 anti-reg nominations for the hit list. These are the hit list suggestions that the White House and the agencies are endorsing as anti-regulatory priorities.