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Key municipal tax programs up for extension shortly.

The House Ways and Means Committee last week passed and sent to the House legislation (HR 5260) to provide extended benefits to the long-term unemployed in communities. The full House is expected to act and send the bill to the Senate as early as this week. The current program expires July 4.

The $6 billion bill could end up serving in the Senate as the vehicle for the more comprehensive urban aid package currently being negotiated between the White House and House and Senate leaders (See related story).

Senate Finance Committee Chairman Lloyd Bentsen (D-Tex.) has indicated his panel could take up its own version of a tax bill as early as next week, when it could consider Bentsen's alternative proposals on the unemployment extenders, as well as legislation to extend the key, expiring municipal tax programs: municipal authority to issue tax exempt mortgage revenue and small issue idb bonds, and the low income housing and targeted jobs tax credit programs.

Sens. John Danforth (R-Mo.) and David Boren (D-Okla.) have proposed legislation, S 2773, to extend the expiring provisions for 18 months, from July 1, 1992 to December 31, 1993.

Despite White House opposition to the permanent changes in the House version, the President is on record supporting extension of the unemployment benefits program and urging action prior to the 4th of July, so most observers believe there is a good chance for action prior to the Congressional Independence Day recess.

As approved, HR 5260 would provide 20 to 26 weeks of emergency federal unemployment benefits to workers whose 26 weeks of state benefits have run out.

To pay for the costs of the extension and permanent changes in the bill, the committee adopted a retroactive provision disallowing federal tax deductions for executive compensation in excess of $1 million annually, effective January 1, 1992, a change which is projected to reduce the federal deficit by over $2 billion over the next 5 years. The committee voted to defer increases in the Federal Unemployment Tax Act (FUTA) until 1995.
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Author:Shafroth, Frank
Publication:Nation's Cities Weekly
Date:Jun 1, 1992
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