Tax News

CCH (cch.taxgroup.com) reports:

  Senate and House negotiators late on April 27 reached agreement on the fiscal year (FY) 2010 budget resolution that preserves the major priorities in President Obama's budget plan. The full Senate and House are expected to vote on the budget resolution during the week of April 27.

  The House will likely vote on the budget resolution on April 29, according to House Majority Leader Steny H. Hoyer, D-Md. Hoyer told reporters that he had met with House Budget Committee Chairman John Spratt, Jr., D-S.C., and members of the fiscally conservative Blue Dog Coalition of Democrats about the possibility of enacting pay-as-you-go (PAYGO) budget rules later in 2009. Hoyer and House Speaker Nancy Pelosi, D-Calif., are hoping to assure members that they will work to offset the costs of middle-income tax cuts, alternative minimum tax (AMT) relief, estate tax reform and health care reform.

Details

  The budget resolution would provide $764 billion in tax cuts over a five-year period. It would extend the 10-percent tax bracket, the child tax credit, marriage penalty relief, and education incentives, as well the 2001 and 2003 tax cuts for families making under $250,000. It would provide three years of AMT relief and would permanently extend the 2009 estate tax reform proposal, which would allow a $7-million exemption for couples and a $3.5-million exemption for individuals. The budget resolution also would provide for two years of extenders.

  The conference agreement includes $97 billion in loophole-closers and revenue-raisers with the specifics of those proposals to be developed by the tax-writing committees. The budget also would extend the making work pay tax credit beyond 2010 through deficit-neutral reserve funds, according to Senate Budget Committee Chairman Kent Conrad, D-N.D. He noted that extending the credit with revenue-neutral funds is consistent with President Obama's directive to ensure that extension of the tax credit is paid for.

  Still unclear is whether the Senate will adopt PAYGO rules as proposed by the Blue Dog Democrats. Members of that coalition won agreement in the House budget blueprint (HConRes 85) to hold a vote on the legislation but Senate Budget Committee members decided not to follow suit. Conrad has consistently resisted attempts to include PAYGO rules, saying it would give the Office of Management and Budget control of scoring legislative costs.

  "This budget is a major accomplishment," said Conrad in a prepared statement. "We are meeting President Obama's goals of reducing our dependence on foreign energy, striving for excellence in education, reforming our health care system and providing middle-class tax relief, all while still cutting the deficit substantially."

  By Jeff Carlson and Stephen K. Cooper, CCH News Staff

Senate Budget Committee Majority Staff Overview of the FY 2010 Budget Conference Agreement

Conference Committee Report on SConRes 13, Concurrent Resolution on the Budget for Fiscal Year 2010, HRRepNo111-89