Tax News

CCH (cch.taxgroup.com) reports:

  House lawmakers had planned to leave Washington, D.C., on September 29, thereby ending stalled negotiations with the Senate and forcing Senate lawmakers to accept their package of tax extenders, energy incentives and alternative minimum tax (AMT) relief bills. However, the failure of the House to pass the Emergency Economic Stabilization Bill of 2008 (HR 3997), will require lawmakers to return to Washington as early as October 1. Since work must continue on a bailout plan for the economy, House and Senate lawmakers might also get another chance to work out their difference on the tax bills.

  House Ways and Means Committee member Jim McDermott, D-Wash., said the Senate has "played all kinds of games with us, so we though we could get out of here without having to have another round." McDermott said the failure of the bailout bill means that House lawmakers could be back in Congress for another couple of weeks, thereby leaving lots of time for a continued standoff between the House and Senate.

  Two energy incentive and extender tax bills were unveiled by House Ways and Means Chairman Charles B. Rangel, D-N.Y., late on September 28, but Democratic leadership decided not to bring them up for a vote when it became clear that the Senate would reject them. Rangel had hoped that the Energy Improvement and Extension Bill of 2008 (HR 7201) and the Temporary Tax Relief Bill of 2008 (HR 7202) would generate support in the Senate because they include modified energy tax incentives and added rural schools provisions.

  Senate Finance Committee Chairman Max Baucus, D-Mont., said the 60 votes necessary to pass House tax legislation are not available, after another attempt failed on September 29. GOP lawmakers do not believe the tax extenders, energy incentives or disaster relief bills should be offset by tax increases, Baucus said. He told reporters that House and Senate lawmakers have not communicated with one another and that the gulf between the two legislative bodies is resulting in a lack of movement on the legislation.

  "The larger issue is the House and Senate just don't talk to one another and work out an understanding," Baucus said. "They're in their little world and we're in our little world, instead of just sitting down like adults, both sides --House and Senate, and working out solutions."

  House Majority Leader Steny H. Hoyer, D-Md., and the group of fiscally conservative House Democrats known as the Blue Dogs, expressed anger that the Senate sent its version of the energy, AMT and extenders tax bill, HR 6049, to the House on September 29 just as lawmakers were preparing to vote on the economic bailout bill. Hoyer said that did not give the House enough time to consider the tax bill since the House planned to adjourn following the bailout vote. Hoyer said the House would reject the Senate strategy to legislate by blunt force. "It is not our intention to come back in a lame-duck session and pass extenders," he said.

  Baucus also said the Senate would not be satisfied with simply approving the House-passed Alternative Minimum Tax (AMT) Relief Bill of 2008 (HR 7005), a $64.6-billion measure that does not include a revenue offset. The measure passed the House on September 24 by a bipartisan vote of 393 to 30 (TAXDAY, 2008/09/25, C.1). He said the Senate views their own bill, HR 6049, as a total package that should not be broken into individual pieces.

  By Stephen K. Cooper, CCH News Staff

Energy Improvement and Extension Act of 2008, HR 7201

Temporary Tax Relief Act of 2008, HR 7202

Renewable Energy and Job Creation Tax Act of 2008, as Passed by the House on September 26, 2008, HR 7060

Congressional Release: Summary of HR 7201 Energy Improvement and Extension Act of 2008

Congressional Release: Summary of HR 7202 Temporary Tax Relief Act of 2008

Senate Finance Committee Release: SFC Chairman Max Baucus Remarks on Extenders