Tax News

CCH (cch.taxgroup.com) reports:

  As Congress considers several health care reform proposals, President Obama said that he is "very optimistic" and hopes that federal lawmakers will make significant progress in the weeks ahead. The president, at a news conference on June 23, made his case for including a public insurance option in the legislation, but also indicated he is open to negotiations on the controversial proposal.

  Obama called the public insurance plan an important tool for keeping down private insurance costs. Nevertheless, Obama noted that Congress is in the early stages of the legislative process and that he is drawing no lines in the sand, except that a final package must lower health care costs and be paid for.

Senate Action

  The Senate Health, Education, Labor and Pensions (HELP) Committee could finish marking up its health care reform bill by the end of the week of June 22, despite the fact that major sections of the legislation remain incomplete, according to Sen. Christopher Dodd, D-Conn. Committee Democrats on June 23 approved 46 Republican amendments and a provision offered by Sen. Tom Harkin, D-Iowa, that would phase in funding for a preventative public health fund over a 10-year period.

  Senate Finance Committee Chairman Max Baucus, D-Mont., said he was uncertain when he would release his health care reform draft, but remained optimistic that it would have bipartisan support. Senate Budget Committee Chairman Kent Conrad, D-N.D., said lawmakers had brought down the overall cost of the bill to around $1.2 trillion and were still working to cut another $200 billion. A preliminary estimate by the Congressional Budget Office (CBO) of an earlier draft had pegged the cost at $1.6 trillion, setting off a firestorm of criticism and forcing the committee to rework their reform plan.

House Energy Bill

  House lawmakers are moving ahead with plans to pass the American Clean Energy and Security Bill of 2009 (HR 2454) before leaving town for the weeklong Independence Day recess. The House Rules Committee plans to hold a hearing on the energy bill on June 25 and is in the process of accepting amendments from lawmakers. If the committee approves the bill, it will likely go to the House floor for a vote on the following day.

  The measure includes a provision to modify the earned income tax credit by increasing the phaseout rate from $5,280 to $13,590, effective after December 31, 2011. The bill also includes a provision to allow the Treasury to transfer money from the general fund to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund to offset any changes in benefit costs and tax revenues caused by the energy bill.

  The president commended the House for moving forward on energy legislation, which he said will lessen U.S. dependence on foreign oil and encourage the development of clean energy sources, such as wind, solar and geothermal power. When asked if the deepening economic crisis warranted a second stimulus package, Obama responded, "not yet," and said it was important to see how the economy "evolves" and how effectively the existing package spurs economic growth.

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

Tax-Related Sections of the Rules Committee Draft Proposal of American Clean Energy and Security Act of 2009, HR 2454