Senator Jon Kyl
(R-AZ) last week introduced bipartisan legislation (S.
1128) that would completely and immediately eliminate
the death tax. However, when inherited assets (such as
the family business) are sold, a capital gains tax would
be levied and a carryover basis would apply to the
assets sold. Sen. Kyl previously introduced legislation
(S. 56) that calls for full and immediate repeal of the
death tax. Of the 24 cosponsors of S.56, none are
Democrats. This fact has convinced Kyl that S. 56 will
never win Senate approval. The new Kyl bill has
bipartisan support – of the six original cosponsors 3
are Democrats and 3 are Republicans, and they are all
members of the Senate Finance Committee. AGC prefers
straightforward repeal of the death tax as the best
option. The AGC Tax and Fiscal Affairs Committee plans
to meet with Senator Kyl in late June to discuss his new
bill. Meanwhile, over in the House of Representatives,
the strongest death tax bill is H.R. 8 (Dunn/Tanner)
that gradually reduces the death tax by 5% per year
until full elimination. That bill now has 185
cosponsors.
Congress Struggles Over
Fiscal Year 2000 Appropriations Bills: The
House and Senate Appropriations Committees are both
struggling with how they can pass the 13 annual
appropriations bills under the tight budget spending
caps established in the Balanced Budget Act of 1997. In
that five-year budget bill, Congress and President
Clinton agreed to a budget accord that required cutting
the federal budget in the future. This year, Congress is
now faced with either making those difficult cuts or
breaking the budget caps. Thus far, Congress is
attempting to stay within the spending parameters
because they don’t want the political fallout of being
blamed for "busting the budget." This strategy will
likely result in Congress passing a limited number of
appropriations bills, with a political showdown over the
bulk of the bills at the end of the fiscal year,
September 30, between the Republican-led Congress and
President Clinton. So far, neither the House nor the
Senate has passed any FY 2000 appropriations bills.
The House
and Senate Appropriations Committees have, however,
considered a few of the bills and prepared them for
floor consideration. Both committees have considered the
FY 2000 Transportation Appropriations bills. The Senate
bill provides $29 billion for highways, which adheres to
the guaranteed funding in TEA-21. The bill also provides
$2 billion for the Airport Improvement Program (AIP), up
from $1.95 billion this year. The House Transportation
Appropriations Subcommittee bill provides the same
funding for the highway program as the Senate and
increases AIP funding to $2.25 billion.
Unless a
deal is struck between Congress and President Clinton to
raise the spending caps, passage of the annual
appropriations bills this year is likely to be a
struggle. Stay tuned for updates as this process
continues to unfold.
Targeted ESA Measure
Introduced: Senators Chafee (R-RI), Crapo
(R-ID), and Domenici (R-NM) introduced S. 1100,
legislation to amend the Endangered Species Act (ESA).
This targeted reform measure would allow designation of
habitat after a habitat conservation plan was approved.
Current practice designates all potential habitat for
species protection, often expanding the protected
designation to areas that have never housed the
particular species.
Blacklisting Rumors
Circulating: Recent visits by Administration
officials with Members of Congress have focused on Vice
President Gore’s blacklisting proposal. Members are
being informed that changes to the federal acquisition
regulations (FAR) should be published soon. These
changes to FAR Part 9, Contractor Responsibility
Determinations, would allow a contracting officer to
disqualify a firm based on an unsatisfactory record of
labor and safety practices. It has been over two years
since Gore announced this initiative to the
AFL-CIO.
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