Daily Tax Update: Action on Tax Extenders Likely to Impede Progress for FSC/ETI Conference.

WASHINGTON PHOENIX LOS ANGELES LONDON BRUSSELS

Efforts by the White House and House Republicans to move a package of expiring tax breaks by attaching them to the child care tax credit conference report bill before the Democratic convention begins July 26 will likely impact negotiations to begin the FSC/ETI bill conference.

Ranking Senate Finance Committee member Max Baucus (D-MT) is opposed to using the child tax credit conference report bill as the vehicle for moving the tax extenders. Baucus said, "Absolutely it has implications for the [ETI] debate. It adds additional grievances to the claims of Democrats that the Republicans are abusing conference procedures. . . . We're having a difficult time right now on proceeding to conference [on FSC/ETI]. This would make it that much more difficult." Baucus did not predict whether the bill would pass the Senate. Baucus said, "It's dicey. I think the far better choice is not to try to jam something through to achieve a political agenda."

House Ways and Means Committee Chairman Bill Thomas (R-CA) refuted Baucus' statement that the child tax credit conference report bill was not the appropriate legislative vehicle to move the expiring tax breaks. Thomas said, "That's his opinion. . . . If you talk to parliamentarians, then you get the answer that governs us."

The issue of revenue offsets for the expiring tax breaks is another contentious issue between Republicans and Democrats. House Speaker Dennis Hastert (R-IL) said, "The President doesn't want any offsets." However, Senate Majority Leader Tom Daschle (D-SD) countered, "We support [the expiring tax cuts], but we think that they ought to be paid for."

TAX BILLS INTRODUCED JULY 13:

H.R. 4820 sponsored by Rep. Lloyd Doggett (D-TX) would deter the smuggling of tobacco products into the United States.

H.R. 4821 sponsored by Rep. Bart Gordon (R-TN) would allow certain agricultural employers a credit against income tax for a portion of wages paid to nonimmigrant H-2A workers.

H.R. 4825 sponsored by Rep. Major Owens (D-NY) would impose an additional tax on taxable income attributable to contracts with the United States for goods and services for the war in Iraq.

S. 2642 sponsored by Rep. Ron Wyden (D-OR) would deter the smuggling of tobacco products into the United States.

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