D.C. update Death Tax and immigration in play at Capitol
Pub Date: 7/1/2006
By ABL Staff
"Death Tax" Permanent Repeal Under Consideration,
Majority Leader Sen. Bill Frist (R-Tenn.) has indicated that he will turn the attention of the Senate to a bill that would repeal the estate tax in full.
While there seems to be more momentum than in past attempts to secure a successful full repeal, there exists significant Democratic opposition to the measure, which could mean that those is favor of repealing the tax may get no further than a procedural vote.
At this time, it appears that Sen. Frist will file a cloture motion to move to the "death tax" bill Tuesday. The issue is politically perilous, particularly for Democrats from more conservative states and likewise for Republicans in more centrist/liberal-leaning states.
With elections looming in November, and a growing deficit that would be exacerbated by another tax cut, this vote could go a long way in painting legislators' campaigns and might give some indication as to how those on the fence might fall.
Should a cloture vote fail, it is anticipated that Sen. Jon Kyl (R-Ariz.) will introduce a Kyl Compromise, which is alternative legislation that would protect most estates from the tax and link the tax rate to that of the capital gains tax rate, which is currently 15 percent.
In previous versions, this compromise would cap the exemption from the tax at $5 million per spouse, or effectively $10 million per couple. This would amount to significant permanent relief from the tax.
Sen. Kyl, and Senate Finance ranking member Max Baucus, (D-Mont.), have been working on finding a middle ground on the issue. Baucus has been toying with his own version that would offer a progressive tax rate structure. Based on the size of the estate, the rate could increase from 15, to 25, to 35 percent, while still exempting the smallest estates from the tax.
There are many in the Senate who believe no action is preferable to a compromise bill. This attitude could prove foolhardy for those who will only vote for full repeal in the long run.
Given the state of rancor in the House and the atmosphere in Washington, this year may be the last, best chance for any sort of relief from the tax before it comes back in full force in 2011. To reiterate what one expert said about permanent relief, 80 percent of something is better than 100 percent of nothing.
ABL supports permanent relief from the "death tax" for families and businesses. For more information about the tax and what you can do to support permanent relief, contact ABL at (301) 656-1494. (At press time the senate had blocked passage of permanent estate tax relief.)
Immigration Bill Passed in Senate'; Contentious Conference Expected
On May 25, the Senate passed the Comprehensive Immigration Reform Act of 2006 (S 2611), by a vote of 62-36. This bill corresponds to a certain degree with the bill that was passed in the House of Representatives in December 2005, entitled the Border Protection, Antiterrorism and Illegal Immigration Control Act of 2005 (HR 4437).
The two bills differ in many key areas and it appears that an unpredictable conference between members of the House and Senate to work out the differences in the legislation will soon be at hand.
Both bills deal with strengthening our borders, but the Senate bill goes further in offering a more comprehensive approach to dealing with the 11-12 million illegal immigrants currently in the U.S. Those that view its language as amnesty for immigrants that have broken the law have opposed it.
The House bill, which does not detail any type of path to citizenship, does include more specific requirements for the monitoring and verification of employees work status by employers.
ABL continues to monitor the progress of the legislation though it is unclear at this time whether a compromise will be reached between the two chambers before the end of the 109th Congress.
Small Business Health Plans Bill Shelved in Senate
Despite some last minute maneuvering by its sponsor, the Health Insurance Marketplace Modernization and Affordability Act of 2005 (S 1955), which would have allowed small businesses to group together to purchase more affordable health insurance, failed to win enough support in the Senate to move forward.
A motion to invoke cloture, which would have cut off debate on the bill, failed 55-43, five votes short of the required 60 minimum.
One of three pieces of legislation that were part of what Republican leadership dubbed "Health Week," the bill appeared to be the most likely of the three to succeed. However, a groundswell of Democratic opposition to the bill clouded its underlying goal of making health care more affordable and accessible for more Americans.
The bill, was sponsored by Health, Education, Labor and Pensions Chairman Sen. Michael Enzi (R-WY), who despite its failure said, "I'm pleased with the vote we got," noting that "this is the first time the Senate has gotten it to a cloture vote."
In fact, many GOP legislators seemed somewhat pleased, as this was the first time legislation of this nature had ever made it out of committee. Legislation establishing "association health plans" had previously cleared the House, but had never been able to make it through the Senate.