This week the House Budget Committee approved a $1.82 trillion budget for fiscal year 2001. The budget, which passed by a nearly party line vote of 23 to 18, is scheduled for debate by the full House next week.

The budget proposal contains a $10 billion increase in discretionary spending, and authorizes tax cuts of $150 billion over five years. It also sets aside $10 billion to pay down the national debt in 2001, with an additional $50 billion to be used for debt reduction or tax cuts over the next 5 years.

"I think people are pretty comfortable with this document," said Chairman John Kasich (R-OH). "It really restrains spending…we protect Social Security, we pay down $1 trillion in debt and we accommodate all the tax relief we want to in this year."

Democrats offered a series of amendments during the markup, all of which were rejected along party lines. Democrats attempted to reduce the tax cuts by half, and tried to specify which taxes would be reduced. In addition, Democrats tried to force a vote on Presidential candidate George W. Bush's $483 billion tax cut package by offering it as an amendment, but the vote was prevented through a procedural roadblock thrown up by Republicans.

If you have any questions, please contact Scott Cahill at (202) 626-8168.

With just over a month until their report is due, the Advisory Commission on Electronic Commerce (ACEC) is faced with the real possibility that none of the proposals currently before the commission will receive the necessary 2/3 super-majority vote.

The ACEC will meet for the final time on Monday and Tuesday in Dallas. By law, any proposal the Commission sends to Congress must be passed by a 2/3 majority of the 19-member panel. However, given the number of competing proposals and the deep divisiveness of the issues, the possibility for a consensus is slim.

Among the proposals the Commission is considering are a recommendation by the National Governors Association that sales and use taxes be simplified, a plan to extend the current moratorium on Internet taxes, and a proposal from Governor James Gilmore (R-VA), Chairman of the ACEC, to permanently ban taxes on e-commerce.

NRF has met with Utah Governor Mike Leavitt and Dallas mayor Ron Kirk, both members of the ACEC, to press for equitable collection of state sales and use taxes across all distribution channels. In addition, NRF sent a letter to all members of the Commission urging them to create a level playing field in any final proposal.

This week, Governor Gilmore suggested that a simple majority might be the best that Congress could hope for from the Commission. "I've spoken to many leaders of Congress and they've indicated that a majority vote would be persuasive," said Gilmore at a press conference. "So my hope is we can come forward with a majority vote…[though] you can't predict what this commission in fact will recommend." Gilmore's position is contrary to NRF's support for a level playing field.

If you have any questions, please contact Scott Cahill at (202) 626-8168.

Retailers fanned out across Capitol Hill this week to push lawmakers for Permanent Normal Trade Relations (PNTR) status for China.

In more than a dozen meetings with Members and staff of the Senate and House of Representatives, members of NRF's International Trade Advisory Council detailed the benefits extending PNTR to China would have, not only for the retail industry but for American consumers. They also explained the impact that failure to grant PNTR would have once China joins the World Trade Organization later this year.

"China is poised to join the World Trade Organization this year, with or without PNTR status," said Erik Autor, NRF's Vice President, International Trade Counsel. "Failure to grant PNTR would put American companies at a severe disadvantage once China is a member of the WTO."

For U.S. retailers, China is a key supplier of goods for the low to moderate priced market, and serves as a source for goods not readily obtainable from domestic sources at the same quality or price, including apparel, footwear, toys and consumer electronics.

If you have any questions, please contact Erik Autor at (202) 626-8104.

In 1998, young adults between the age of 12 and 19 account for $141 billion of consumer spending.

March 21, 2000 - Credit Management Advisory Council, Washington, DC
March 22-23, 2000 - Taxation Committee, Washington, DC

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