The Republican congressional leadership continues to search for ways to push an expensive estate tax reform package through Congress before it leaves for an extended recess in late September or early October.
But insurance industry officials don’t believe that the fourth time for the effort to get the bill through the Senate this year will be the charm.
Dermot Healey, president of the Association for Advanced Life Underwriting, Falls Church, Va., confirmed that the congressional Republican leadership is holding “continuing discussions” on the potential reconsideration of the so-called “trifecta” legislation that failed to win Senate support in early August, the third time this year a legislative package that included reform or repeal of the estate tax had been considered.
“The 60 votes needed to move forward with consideration of the bill were not garnered in August and without gaining additional support for the bill in its current form we don’t expect it to be considered before the election,” Healey said.
“We continue to monitor this fluid situation, as we are concerned with the passage of estate tax reform that would result in this level of revenue loss. AALU continues to advocate in favor of fair, fiscally responsible, and permanent estate tax reform.”
The latest proposals included a suggestion from Sen. Trent Lott, R-Miss., that the Republicans include in the package a Democratic proposal to extend the Medicare prescription drug benefit enrollment deadline as a sweetener. Lott made the suggestion public Sept. 12.
But Sen. Charles Grassley, R-Iowa, chairman of the Senate Finance Committee, said Sept. 13 that he had heard of the proposal as a “rumor, and I am not going to consider it a serious rumor until leadership talks to me about it.”
And Rep. William Thomas, R-Calif., chairman of the House Ways and Means Committee, responded by saying, “There are a number of ideas that have been floated. Some are better than others.”
Grassley, meanwhile, said in a memo released to reporters Sept. 13 that the inability to extend the expired tax cuts before Congress recesses to campaign for re-election could, at best, create administrative problems for the Internal Revenue Service or, at worst, cause some taxpayers to miss out on tax benefits they are entitled to. The tax extenders were left in limbo when the Senate in late July failed to stop debate on a so-called “trifecta” package.
Besides extending the tax cuts, the bill would have increased the minimum wage and made permanent an estate tax cut package that would cost an estimated 80% of the cost of total repeal. The measure failed by 3 votes, four after Sen. William Frist, R-Tenn., a prime supporter of the expensive tax cut package, changed his vote so as to give him the flexibility to seek a re-vote on the bill. The package was devised at Sen. Frist’s request by Rep. Thomas.
The “extenders” package includes provisions to extend and expand the research and development tax credit and other business tax benefits, and tax cuts for individuals, including the state sales tax deduction, tuition deduction and deduction for teachers’ out-of-pocket classroom expenses.
Frist had told reporters he would not bring the trifecta legislation to the floor this month if a Republican working group couldn’t sweeten the legislation to gain the three additional votes for passage.
“If not, we’ll not bring it back up,” he said. “We all know politics is playing a role in all of this. The closer we get to the election, the more of a challenge it will be.”
Frist charged that Democrats are “obstructing” Republicans from passing the bill.
But Sen. Harry Reid, D-Nev., Democratic minority leader, said in a statement later that, “All of the items that we need to pass, such as the state and local sales tax deduction, could get done by the Senate in two minutes if the Republicans would simply give up holding them hostage to their desire to provide billions of dollars of tax cuts to the wealthiest 8,100 families in our country.”