Daily Tax Update - January 25, 2008

TREASURY SECRETARY HOPES SENATE’S STIMULUS PACKAGE SIMILAR TO HOUSE PLAN:  At a press conference yesterday, Treasury Secretary Paulson said that he hoped that the Senate’s stimulus plan would “set a high standard” like the House proposal.  Paulson said, “I think what we've got is great. I'm very open, as is everyone, to working with the Senate.” Paulson added, “Now, I recognize the Senate has an important role to play. I continue to believe the principles we have here are the right principles. This agreement reflects those principles. . .And we know that the Senate is very important and they're going to go through their own deliberations. But, again, I think the American people are not going to have a lot of patience for taking time. And I think the House has set a standard, and it's a very important standard, and the American people—we owe the American people speed, and we owe them a package that's going to work.  And that's the other thing that's key here. In the past, you've seen ‘different stimulus bills’ where there are parts of it that really are going to have very little to do with stimulus or very little to do with making a difference in this year. And so the House has been disciplined, it set a high standard, and I'm looking forward to working with the Senate.”

  • When asked if there would be a second stimulus bill, Paulson replied, “I'm focused on this bill now. And there are going to be a number of policy priorities. We all have policy priorities, but the beauty of this is everyone agreed that for the good of the country, we're going to put those on a different track. This is on the fast-track. And let's get this done, and then let's think about other priorities.” Paulson added, “So the test we want to do, and what was so productive about the discussions in the House—and I would say this: The Speaker and the Leader, both Nancy Pelosi and John Boehner, were incredibly disciplined, because there were all kinds of ideas that came in. . .There are all kinds of ideas, but if you hold it up and you say, is this stimulus; how quick is this going to be; how quick will the money get out there this year—I think if we can keep that discipline in the Senate, and I'm optimistic we'll be able to.”
  • Today, House Minority Leader John Boehner (R-Ohio) urged the Senate to accept the package. Boehner said, “We negotiated a solid bipartisan agreement that the White House will support. It would be irresponsible for Senate Democrats to load this bill up with pork and other spending.”
  • Today President Bush said, “Congress should move it quickly. And I understand the desire to add provisions from both the right and the left. I strongly believe it would be a mistake to delay or derail this bill.”
  • Senate Majority Leader Reid said yesterday, “We understand the delicate balance in the House, but those founding fathers understood we have two delicate balances, one in the House and one in the Senate.”
  • Senate Finance Committee Chairman Baucus said yesterday that the ultimate stimulus package would be “what Congress wants—and that's both bodies.” Baucus’ stimulus plan is likely to include an expansion of unemployment insurance. The date for the Finance Committee’s mark up next week has not been announced.

TAX BILLS INTRODUCED JANUARY 24TH:
S.2552: A bill to amend the Internal Revenue Code of 1986 to provide a stimulus to small business by increasing expensing for small businesses in 2008, extending the length of the carryback period for net operating losses during 2007 and 2008, and extending the research and development credit.
Sponsor: Sen Snowe, Olympia J. [ME] (introduced 1/24/2008)      Cosponsors (2)

S.2553: A bill to modify certain fees applicable under the Small Business Act for 2008, to make an emergency appropriation for certain small business programs, and to amend the Internal Revenue Code of 1986 to provide increased expensing for 2008, to provide a 5-year carryback for certain net operating losses, and for other purposes.
Sponsor: Sen Kerry, John F. [MA] (introduced 1/24/2008)      Cosponsors (None)

INTERNAL REVENUE SERVICE - CIRCULAR 230 DISCLOSURE:
As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.

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