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Financial Planning > Tax Planning > Tax Reform

Frist Calls For Prompt Action On Trifecta Bill

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Senate Majority Leader William Frist, R-Tenn., says his colleagues must pass H.R. 5970 quickly.

H.R. 5970, the “trifecta” bill, includes provisions that would eliminate federal estate taxes for most estates; increase the federal minimum wage for most workers to $7.25 per hour, from $5.15 per hour; and extend the research and development tax credit and other popular tax breaks.

“If the Senate kills the trifecta bill, we will not return to it this year,” Frist said today in a speech on the Senate floor, according to an advance version of his remarks. “That means no permanent death tax reform, no tax policy extenders, and no minimum wage increase. It is now or never — this week — and members should understand that.”

Frist also called for swift action on H.R. 4, a bill that is supposed to shore up private pensions and the agency that backs them, the Pension Benefit Guaranty Corp.

If Congress fails to pass a pension bill and pension plans collapse, the government could have to spend billions of dollars to help workers get their pension benefits, Frist said.

Frist criticized Democrats who want to go back to the pension bill conference committee or amend H.R. 4. “The Senate must clear the pensions bill, clean, so the president can sign it this month,” Frist said.

Frist said he wants the Senate to vote on the pension bill sometime this week and the trifecta bill Friday.

Sen. Barbara Mikulski, D-Md., said Republican Senate leaders are delaying a vote on the pension bill by forcing members of the Senate to vote on the trifecta bill first.

“The Republican leadership has decided that protecting a few zillionaires’ estates after they die is more important than protecting pensions for retirees while they are still alive,” Mikulski said.

Sen. Edward Kennedy, D-Mass., a member of a House-Senate conference committee that spent more than 4 months trying to iron out differences between H.R. 2830, which was the major House pension system bill, and S. 1783, the Senate version, called Republicans’ decision to link the minimum wage and estate tax issue “arrogant.”

“The American people overwhelmingly support an increase in the minimum wage,” Kennedy said Monday on the Senate floor. “It has not been increased in the last 9 years, and, over a corresponding period of time, we here in the Senate have increased our own pay more than $30,000.”

The pension bill conference committee that Kennedy served on has been unable to produce a conference report.

The authors of H.R. 4 created it by using pension provisions from H.R. 2830. The authors put many of the tax provisions from a conference committee version of the pension bill into H.R. 5970.

In addition to affecting defined benefit pension plans and defined contribution retirement plans, H.R. 4 would

- Impose new standards on sellers of corporate-owned life insurance.

- Encourage insurers to sell life insurance policies and annuity contracts with long term care riders.

- Let companies with excess pension assets to use the assets to pay for future retiree health benefits.

- Create new rules for donor-advised funds.

- Establish a special taxidermy property rule for donors who stuff animals and give them to charity.

Some airlines have been complaining that the pension provisions in H.R. 4 would give competitors unfair advantages in dealing with pension obligations.

Unions have been complaining that a “tipped wage fairness” section at the end of H.R. 5970 would prohibit states from enforcing minimum wage rules for waiters and other workers who receive tips. That provision would cut the effective minimum wage for some workers by $5.50 per hour, according to an analyst at the Economic Policy Institute, Washington.

Links to the text of H.R. 4 and other information about the bill are on the Web at Document Link

Links to the text of H.R. 5970 and other information about that bill are at Document Link


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