Washington Update


There have been many moving parts in Washington, DC this week between a Continuing Resolution, Food Safety and extending the Bush tax cuts.

Continuing Resolution and Food Safety

Per this current fiscal year, none of the twelve FY 2011 spending bills have been enacted by Congress. As such a continuing resolution was introduced earlier this week.  A continuing resolution (CR) is legislation that is used to continue to fund the United States government when regular spending bills do not get passed.

The current CR total level is equivalent to FY 2011 levels, $1.09 trillion. Within the total funding amount, there are well over a hundred pages worth of “anomalies” which make changes to individual program levels.  You also find gems like this one, the legislation allows the Bureau of Land Management to “establish up to 10-year contracts with ranchers that care for excess wild horses and burros,” and increases the bureau’s budget by just under $12 million “to maintain the thousands of wild horses and burros in its care.”’

In addition to providing funding for the government, the House has included food safety language as Division D in the attached text of the year-long CR. The language is similar to S. 510, but some changes have been made to address funding and budgetary issues. Because of the timeliness of this legislation, the text is still being reviewed for issues that will be flagged, that appear to contradict those sections of S. 510 applicable to farms and ranches.

Right now it is unclear whether the House has the votes to pass the CR with food safety attached, or whether the Senate will accept a year-long CR.

Taxes

The Senate is moving forward with legislation to enact the tax agreement reached earlier this week between the White House and congressional leaders. The legislation includes the $5 million estate tax exemption and 35 percent top estate tax rate sought by Farm Bureau (Lincoln/Kyl proposal). Majority Leader Harry Reid (D-Nev.) filed cloture on 12-8 on the Reid/McConnell tax amendment 4753. The vote will occur when the cloture motion ripens at 3:00 pm Monday. Sixty votes are needed to invoke cloture. Farm Bureau supports cloture and passage of the legislation.

Senate movement of this end-of-the-year tax bill stands in sharp contrast to the House, where yesterday the House Democratic Caucus voted to oppose the tax framework.

The bill contains the following list of tax provisions that are supported by Farm Bureau:

  • Establishes an estate tax exemption of $5 million per person and top rate of 35 percent for two years (2011-2012);
  • Reinstates stepped-up basis;
  • Indexes the estate tax exemption for inflation;
  • Estates of those dying in 2010 are given a choice of the new exemption and rate or current 2010 law (no estate tax and modified carryover basis);
  • Provides for a spousal transfer of any unused estate tax exemption amount (2011-2012);
  • Extends for two years tax incentives for biodiesel (2010-2011);
  • Extends for one year tax incentives for ethanol and the tariff on imported ethanol (2011);
  • Extends for one year the alternative fuels credit fuel tax credit for liquid fuels derived from biomass and other sources (2011);
  • Extends for one year the tax credit for alternative fuel refueling property (2011);
  • Extends for two years lower income tax rates for all taxpayers (2011-2012);
  • Extend for two years the provision encouraging contributions of conservation easements (2010-2011);

The amendment does not repeal expanded reporting rules for Form 1099 that required businesses that pay $600 or more during the year to vendors and to file an information report with each provider and with the IRS.

The House has not taken up legislation to extend the tax cuts because the most liberal members of the House are opposing it.  At this point it is unsure when they will do so.

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One response to this post.

  1. […] Senate on Monday voted to invoke cloture on a bill that extends tax cuts to all Americans and includes estate tax provisions supported by Farm Bureau. This sets the stage […]

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