Daily Tax Update - February 10, 2011: Treasury, IRS Budgets Among 70 Spending Cuts Proposed By House Republicans

TREASURY, IRS BUDGETS AMONG 70 SPENDING CUTS PROPOSED BY HOUSE REPUBLICANS:  Today, House Appropriations Committee Chairman Hal Rogers (R-KY) announced his intent to cut $100 billion in spending in the upcoming Continuing Resolution ("CR") compared to the President’s fiscal year 2011 request.  Rogers said, "My Committee has been working diligently to go line-by-line in every agency budget to find and cut unnecessary spending to reduce our deficit and help our economy thrive.  After meeting with my subcommittee Chairs, we have determined that the CR can and will reach a total of $100 billion in cuts compared to the President’s request immediately - fully meeting the goal outlined in the Republican ‘Pledge to America’ in one fell swoop.  Our intent is to make deep but manageable cuts in nearly every area of government, leaving no stone unturned and allowing no agency or program to be held sacred.  I have instructed my committee to include these deeper cuts, and we are continuing to work to complete this critical legislation."

  • Yesterday, Rogers released a partial list of 70 spending cuts that will be included in an upcoming CR bill.  According to Rogers’ press release, "The CR legislation will fund the federal government for the seven months remaining in the fiscal year and prevent a government wide shut-down, while significantly reducing the massive increases in discretionary spending enacted in the last several years by a Democrat majority.  A full list of program cuts will be released when the bill is formally introduced."  Rogers said, "Never before has Congress undertaken a task of this magnitude.  The cuts in this CR will represent the largest reduction in discretionary spending in the history of our nation.  While making these cuts is hard, we have a unique opportunity to right our fiscal ship and begin to reduce our massive deficits and debt.  We have taken a wire brush to the discretionary budget and scoured every program to find real savings that are responsible and justifiable to the American people."  The press release said that spending cuts included in the CR will include, the "Department of Treasury – $268M and the Internal Revenue Service – $593M."  It is unclear which particular programs in these agencies will fall under these cuts.
  • The list can be accessed here.

CHANGES OCCUR TO TAX-WRITING COMMITTEES:  Today, Senate Finance Committee member Sen. Jon Kyl (R-AZ) announced that he would not run for re-election in 2012.  Kyl, the Senate’s second ranking Republican, also serves as Senate Minority Whip. 

  • In January, another Finance member (and Senate Budget Committee Chairman) Sen. Kent Conrad (D-ND) announced that he would not seek re-election.
  • Yesterday, newly-appointed House Ways and Means Committee member Rep. Chris Lee (R-NY) resigned from Congress.  It is unclear when a replacement will be selected to replace Lee on the Committee.

TAX BILL INTRODUCED FEBRUARY 9TH:
H.R.567:  To amend the Internal Revenue Code of 1986 to provide for reporting and disclosure by State and local public employee retirement pension plans.
Sponsor: Rep Nunes, Devin [CA-21] (introduced 2/9/2011)   Cosponsors (38)
Latest Major Action: 2/9/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.  

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.

STEPTOE & JOHNSON LLP - TAX PRACTICE
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