Congress Races to Finish Tax Package, Budget Before Holidays

December 17, 2010 Bookmark and Share

The scheduled lame duck session wound to a close this week with midnight passage Thursday of a massive tax compromise and an unclear path for the FY2011 budget.

The Senate passed the tax package on Wednesday by an 81 to 19 vote, and the House passed it just after midnight Thursday by a 277 to 148 vote after a failed attempt earlier in the day.

The $858 million package, which President Barack Obama signed Friday, touches on everything from Bush-era tax cuts to the estate tax to renewable fuels tax credits.

In a major victory for agriculture, the package included a two-year estate tax provision as negotiated, which will provide an exemption of $5 million and a maximum tax rate of 35 percent. This provision was strongly supported by NAWG and other agricultural groups.

The chamber failed to adopt an amendment led by Rep. Earl Pomeroy (D-N.D.) that would have changed the estate tax provisions to call for a $3.5 million exemption with a 45 percent maximum tax rate.

In another victory for the farm community, the approved tax agreement extends through 2011 the ethanol tax credit at the current level of 45 cents per gallon and the tariff on imported ethanol at the current level of 54 cents. The agreement would also reinstate the biodiesel tax credit, which expired at the end of last year, for 2010 and extend it through 2011.

Another serious issue, the federal budget for FY2011, remains without an endgame at press time Friday evening, even as the latest short-term continuing resolution (CR), which is funding federal agencies at the FY2010 level, expires on Saturday.

Last week, the House passed an extended CR that would fund government operations basically at FY2010 levels through FY2011, which ends Sept. 30, 2011.

Leaders in the Senate wanted to consider an omnibus, but couldn’t gather enough support to do so, prompting Senate Majority Leader Harry Reid (D-Nev.) to pull the measure Thursday night.

To allow Senate negotiations to continue into next week, if necessary, the House late Friday passed a five-day continuing resolution, which the Senate could take up sometime Saturday if its work appears unlikely to be completed before the end of the day.

NAWG is tracking a list of priorities yet to be resolved this session, including the budget, particularly spending for agricultural research and biofuels programs in the 2008 Farm Bill; the fate of a food safety bill that passed in recent weeks but hit procedural hurdles; and rail reform legislation.

NAWG will not publish a newsletter the next two weeks because of the Christmas and New Year’s holidays, but will continue to update stakeholders through Facebook, Twitter and direct e-mail.