Tax Issues: Political Background- Democrat Opposition Fades, While GOP Concerns Increase- Estate Tax Issues Remain
Janet Hook and Martin Vaughan reported in today’s Wall Street Journal that, “The final obstacle to President Barack Obama’s tax deal—the opposition of House Democrats—appeared to be melting away Tuesday as strong Senate support for the legislation turned up pressure on liberal critics to concede.
“‘It’s a fast-moving train,’ said Rep. Peter Welch (D., Vt.), who has led opposition to the legislation to extend the Bush-era tax cuts for all income groups. ‘The momentum is all in its favor, that’s for sure.’”
The Journal article added that, “House Democratic leaders are expected to bring up the bill as early as Wednesday and allow a vote on an amendment to raise the bill’s estate-tax rate, which liberals say is too low. But Democratic critics concede that odds of the bill changing are long.”
Today’s article explained that, “House Majority Leader Steny Hoyer (D., Md.) said he expected Democratic support for the deal to reach beyond the party’s conservative wing because he believed there were ‘compelling reasons’ to support it, such as the unemployment-benefits extension, a two percentage-point cut in payroll taxes and tax credits for college tuition expenses by middle income families.
“To address liberal concerns that the bill is too generous to wealthier Americans, House Democratic leaders are expected to allow a vote on an amendment to change the estate tax provisions. If the amendment passes, it would send the legislation back to the Senate for reconsideration. GOP leaders promised such a move would blow up the deal.
“‘If the House Democratic Leadership decides to make partisan changes, they will ensure that every American taxpayer will see a job-killing tax hike on Jan. 1,’ said Senate Minority Leader Mitch McConnell in a statement Monday evening.”
However, Michael Gleeson and Ian Swanson reported yesterday at The Hill Online that, “House Majority Leader Steny Hoyer (D-Md.) on Tuesday signaled the House would not block the package.”
Lori Montgomery reported in today’s Washington Post that, “As the Senate prepared Tuesday to push through a sweeping tax package negotiated by the White House and congressional Republicans, House leaders were looking to amend the measure to satisfy the concerns of angry liberals without unraveling the deal altogether.
“Senate leaders, meanwhile, postponed a vote on the $858 billion package until Wednesday afternoon. Despite the delay, the measure was expected to sail through the Senate with even stronger support than it received in a test vote this week, when 83 senators voted to advance the package in the strongest bipartisan vote on a major initiative since President Obama took office.”
The Post article noted that, “The strong Senate vote also appeared to have weakened resolve among House Democrats to block the measure when it comes to the floor this week. After meeting for two hours with rank-and-file lawmakers late Tuesday, senior Democrats said the House is likely to stage votes to change the terms of a revived estate tax that many Democrats view as overly generous to the wealthy.
“Outraged by the agreement to exempt individual estates worth as much as $5 million from taxation, senior Democrats said they would press to lower the threshold to $3.5 million. They also want to impose a stiffer tax on larger estates, by setting the rate at 45 percent rather than the 35 percent demanded by Republicans and agreed to by Obama.”
More specifically on the estate tax issue, Simmi Aujla reported yesterday at Politico that, “House Majority Leader Steny Hoyer kept the door open Tuesday for changes to the estate tax provision embedded in the larger tax deal that’s headed to the House floor.
“The Maryland Democrat said House Democrats are concerned about the provision, which they say is too generous to high earners.”
And Rep. Chris Van Hollen (D-Maryland), the incoming Ranking Member of the House Budget Committee stated in an Op-Ed published in today’s Washington Post that, “Right now, Congress is debating the best way to address tax relief for American families – a critical question as our country continues to recover from the recession. House Democrats are committed to getting the best possible deal for taxpayers and ensuring that taxes on working families don’t go up on Jan. 1. But we also don’t think it’s fiscally responsible or fair to provide a tax-cut bonanza to super-rich estates.”
Rep. Van Hollen added that, “Let’s also fix the estate tax giveaway, which fails on job growth, fails on deficit reduction and fails on fairness in a time of economic crisis. Do we really want to borrow billions from China to give the wealthiest 6,600 estates a tax break averaging more than $1.5 million?
“House Democrats think this trade-off should be debated and voted on in the light of day. With Washington Republicans sharpening their budget knives to cut spending on national priorities such as education, border security and public safety, it is hard to believe they think it’s wise to give a windfall to heirs such as Paris Hilton. Let’s find out if Republicans really want to jeopardize income tax, payroll tax and estate tax relief for every American in order to provide a budget-busting bonanza to the country’s richest estates.”
Russell Berman and Mike Lillis reported yesterday at The Hill Online that, “The chairwoman of the House Rules Committee, Rep. Louise Slaughter (D-N.Y.), said there would likely be a separate House vote on changing the estate tax provision, which several lawmakers have called a giveaway to Republicans. ‘I think we’ll give it a try, yes,’ Slaughter told reporters after leaving the [Democratic caucus] meeting [Tuesday].”
As some House opposition to the tax package appears to soften, while estate tax concerns remain, Lori Montgomery pointed out in her Washington Post article today that, “As liberals complained, a growing chorus of conservatives also criticized the tax package, particularly its failure to permanently extend the Bush-era cuts.”
More specifically, Jennifer Steinhauer reported in today’s New York Times that, “Republicans are under pressure from the Tea Party movement and some other conservatives to reject the compromise tax bill, potentially complicating its passage and highlighting how the Republican Party is likely to face a persistent rightward push when it takes control of the House next month.”
The Times article pointed out that, “The tax-cut package passed its first test in the Senate on Monday with overwhelming Republican support, and the number of House Republicans who have expressed opposition remains limited. The Senate is expected to vote on the bill as early as Wednesday morning, and the House could take it up shortly after.
“Aides to House Republican leaders said they still expected a sizable majority of their members to vote for the legislation. But each defecting Republican represents another Democrat who must be swayed to vote for the bill — which has already been decried by many in that caucus — and adds to the public relations problem for the legislation, which neither party has promoted as a thing of beauty.”
Similarly, Molly K. Hooper reported yesterday at The Hill Online that, “A growing number of Republican lawmakers in the House say they will oppose the tax-cut bill that is headed their way.”
And with respect to the executive branch, an update posted yesterday at Politico reported that, “President Obama has had ‘good conversations’ with members of the House over passing his tax deal with Republicans, [White House press secretary Robert Gibbs] said. ‘I think we are on a path toward getting this agreement through the House,’ he said.”
Tax Issues: Biofuels
Reuters writers Charles Abbott and Tom Doggett reported yesterday that, “U.S. Senate leaders have not decided whether to allow a vote on an amendment to cut the U.S. ethanol tax credit by 20 percent that would be part of a massive tax bill, said Senate aides on Tuesday.”
“When the Senate convened on Tuesday morning, Majority Leader Harry Reid said the Senate would be able to vote soon on the $858 billion tax-cut package. He did not discuss potential amendments such as Senator Dianne Feinstein’s proposal to cut the ethanol credit to 36 cents.”
The Reuters article added that, “Feinstein’s office says it has not been told by leadership if a vote will be allowed on the ethanol amendment. The bill is being considered under a format that allows any senator to block discussion of an amendment.
“Other Senate aides and ethanol lobbyists said they had no word if there would be a vote on ethanol incentives.”
Todd Neeley reported yesterday at the DTN Ethanol Blog that, “Chances are that an attempt by Sen. Dianne Feinstein, D-Calif., to amend a Senate proposal to extend the 45-cent volumetric ethanol excise tax credit and the 54-cent import tariff for one year, won’t see the light of day, Sen. Charles Grassley, R-Iowa, said during his weekly press conference with agriculture reporters Tuesday.”
Meanwhile, Daniel Looker reported yesterday at Agriculture Online that, “So far, Senator Chuck Grassley and other Midwestern senators from both parties seem to have salvaged ethanol and biodiesel tax credits for another year.
“But next year they’re not expecting to maintain the status quo, Grassley told reporters Tuesday.
“‘I think where we are for next year, we’re all kind of committed to taking a new approach and the phasing out of the tax credits,’ Grassley told Agriculture.com.”
Mr. Looker added that, “Grassley said he would like to see a five- or ten-year phase out that would shift public support to more flexible fuel vehicles, blender pumps and dedicated ethanol pipelines for what he calls ‘a maturing industry’ that’s not quite ready to stand on its own.
“Grassley said that his support for that concept isn’t necessarily an endorsement of Growth Energy’s Fueling Freedom plan, which calls for all three of those methods of gaining more market access for ethanol. But he’s willing to sit down and discuss it.”
In other news regarding biofuels, Forum writer Marino Eccher reported yesterday at the Grand Forks Herald Online (ND) that, “A Fargo-based energy company is moving forward with plans for the nation’s first-ever beet ethanol plant – the first step in an ambitious plan to turn one of the Red River Valley’s top crops into a biofuel mainstay.
“The proposed plant was announced Monday by Green Vision Group, which touts beets as a cleaner, more efficient alternative to corn, which dominates current ethanol production. Lloyd Anderson, one of the Green Vision partners, said the company hopes to have a pilot beet ethanol plant up and running by 2012.”
Clean Water Act
A news release yesterday from the American Farm Bureau stated that, “A diverse group of agricultural organizations are voicing their opposition to controversial legislation that would substantially change the Clean Water Act by expanding the Environmental Protection Agency’s authority. In a letter to members of the Senate, the groups were critical of ‘an 11th-hour effort’ to include the controversial bill S. 1816, The Chesapeake Clean Water and Ecosystem Restoration Act, in the potential Lands, Waters and Wildlife omnibus legislation.
“‘S. 1816 would fundamentally alter the state-federal relationship within the watershed and enact unprecedented changes to the Clean Water Act,’ the letter stated. The groups said that while the provisions would apply in six states and the District of Columbia, EPA has repeatedly said it views the Chesapeake Bay proposal as the model for regulatory action in other major watersheds, such as the Mississippi River Basin.
“With the letter, the groups sent Senate members a side-by-side comparison chart that explains their primary areas of concern.”
Ron Hays reported yesterday at the Oklahoma Farm Report Online that, “The US Department of Agriculture will conduct a cost-benefit analysis of the so called ‘GIPSA Rule’ that would significantly change the way livestock is marketed in the United States if adopted. Agriculture Secretary Tom Vilsack announced the analysis during a Monday Conference Call with Meat Industry officials. The National Chicken Council was one of the groups on the call- and their spokesman Richard Lobb told Dow Jones that this is the first time that they have heard USDA say they will conduct an extensive analysis.
“Vilsack declined to speculate how long the review process would take, but said the rule as published June 22 was a draft and could be extensively changed before being finalized, the National Chicken Council reported in a news release after Monday’s teleconference.”
Reuters writer Timothy Gardner reported yesterday that, “Despite tough economic times, rich countries must make good on short-term pledges of billions of dollars in financing to help developing countries tackle global warming, the U.S. climate envoy said.
“The climate deal forged among more than 190 countries at the annual U.N. talks in Mexico’s Cancun beach resort on Saturday included agreements on measuring emissions, technology transfer and $100 billion in financing for developing countries from 2020.”
The article added that, “Four Republicans in the U.S. Senate — James Inhofe, John Barrasso, David Vitter and George Voinovich — have opposed the fast-start financing, saying the money should be spent on easing the deficit.
“But the short-term financing is ‘extremely important, a core part of deal,’ Todd Stern, the top U.S. climate diplomat, told reporters.”
Ben Geman reported yesterday at The Hill’s Energy Blog that, “Sen. Jay Rockefeller (D-W.Va.) says he could know by Tuesday’s end whether his bill to block looming Environmental Protection Agency (EPA) climate-change rules will get a vote in the lame-duck session.
“‘I will have a better idea about that at the end of the day,’ Rockefeller said in the Capitol, noting he spoke with Majority Leader Harry Reid (D-Nev.) about the matter Monday.”
Mr. Geman explained that, “His plan would freeze, for two years, EPA rules aimed at slowing emissions from power plants, refineries and other industrial plants. The rules are slated to begin taking effect in January.
“Reid earlier this year said he would bring Rockefeller’s bill to the floor but has since equivocated. Either way, his plan and more aggressive efforts to block EPA will be in play next year, when House Republicans will have the agency in the crosshairs.”
Reuters writer Jonathan Lynn reported yesterday that, “Members of the World Trade Organization are showing new energy and determination to reach a global trade deal but must now abandon fixed positions to clinch the agreement, the head of the WTO said on Tuesday.
“WTO Director-General Pascal Lamy said it was no longer enough to have ‘answering machines’ around the table as the WTO’s 153 members respond to a call by leaders of the G20 and APEC to finish the Doha round trade talks next year.
“‘We are at the point where we must have negotiators, and all negotiators have to be prepared to move out of their comfort zones toward agreement,’ Lamy told the WTO’s General Council.”