Daily Tax Update - January 6, 2009

111th CONGRESS CONVENES – PRICE TAG FOR STIMULUS BILL COULD TOP $1 TRILLION:  Today, the new Members of Congress of the 111th Congress were sworn into office.

  • After yesterday’s meetings between President-elect Obama and House and Senate leadership officials, Senate Majority Leader Harry Reid suggested that the cost of the new economic stimulus package could be more than $1 trillion over two years. Reid said, “We have not received, of course, the exact package from the President-elect and his folks, but he has indicated that there are at least 20 economists he has talked with and all but one of those believe it should be from $800 [billion] to $1.2 or [$1.3] trillion.” 
  • The bill is expected to include roughly $300 billion in tax cuts and about $500 billion in spending, including funding for infrastructure improvement projects, renewable energy projects, and assistance to states. The business tax incentives expected to be included are higher limits for business expensing under Section 179, accelerated depreciation on new capital expenditures, and extending the net operating loss carryback provision from two years to five years. For individuals, the new stimulus package may expand the first-time homebuyers tax credit, increase and modify renewable energy tax incentives, and implement a payroll tax holiday.
  • The President-elect is seeking bipartisan support for his new stimulus package. After yesterday’s meetings on Capitol Hill, Senate Minority Leader Mitch McConnell said, “I think [Obama] would like to have a large bipartisan vote in favor of this package. And he knows...that the way to do that is obviously for it to have elements that are appealing to Republicans and to have Republican participation. I think this bill is going to start out and hopefully end as an example of very significant bipartisan cooperation.”

SÁNCHEZ SELECTED TO FILL WAYS AND MEANS VACANCY:  Rep. Linda Sánchez (D-CA) was appointed by the House Democratic Steering Committee to fill the last vacant Democratic seat on the House Ways and Means Committee. The House Republican Steering Committee is scheduled to meet tomorrow to decide committee assignments.

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