Tax News

CCH (cch.taxgroup.com) reports:

House Majority Leader Steny H. Hoyer, D-Md., and Ways and Means Committee Chairman Charles B. Rangel, D-N.Y., threatened to withhold floor consideration of extenders tax legislation in 2008 unless House and Senate Republicans accept their proposal to offset the bill's cost with higher tax revenues. Hoyer, Rangel and Democrats on the committee promised at a June 12 press conference that GOP lawmakers would not force them to abandon House pay-as-you-go (PAYGO) budget rules and bring the bill to a vote in the House without offsetting tax increases.
More than 100 House lawmakers sent a letter to Senate Minority Leader Mitch McConnell, R-Ky., indicating their support for the Renewable Energy and Job Creation Bill of 2008 (HR 6049), which passed the House on May 21 (TAXDAY, 2008/05/22, C.1). If the final extenders bill does not include an offsetting tax increase, its cost will have to be paid for by increased borrowing that will ultimately increase the budget deficit, they said.
"We believe the research and experimentation tax credit, various accelerated depreciation provisions, the energy tax incentives, the education, charitable and other individual tax incentives in HR 6049 are very important to American families and to the U.S. economy," the letter to McConnell reads. When asked if the House would eventually back down in its demands rather than see the bill fail to pass before Congress adjourns in 2008, Hoyer said he would not even bring the bill to the House floor for a vote. Rangel admitted that House Democrats did abandon the same promises in late 2007 with regard to passage of legislation providing relief from the alternative minimum tax, but he said Democrats are united in calling for a fully offset extenders bill.
Rangel's and Hoyer's comments appeared to be designed to send a message to Senate Republicans, who have vowed, just as strongly, not to accept any tax increases. Ways and Means member Paul Ryan, R-Wis., predicted that House Democrats would ultimately accept an extenders bill that does not include tax hikes. Ryan charged that House Democrats only adhere to PAYGO rules when it is convenient. Democrats are eagerly supporting other costly measures to extend unemployment benefits and provide benefits for military service members that do not have offsetting tax increases, he explained. "The fact is, they turn PAYGO off when it's not convenient," said Ryan, who is the House Budget Committee ranking member. "The reality is PAYGO does not exist."
By Stephen K. Cooper, CCH News Staff.