Daily Tax Update - July 20, 2011: "Gang Of Six" Proposal Gains Traction

"GANG OF SIX" PROPOSAL GAINS TRACTION:  HOUSE PASSES "CUT, CAP AND BALANCE" PLAN:  The deficit reduction plan circulated yesterday by the "Gang Of Six" appears to be gaining support.  However, Senate Leaders expressed skepticism yesterday that they could pass the plan by the August 2 deadline. 

  • Yesterday, Senate Majority Whip Dick Durbin said, "The Gang of Six plan has not been drafted, nor has it been scored by the CBO; it’s not ready for prime time."  Durbin added, "But as a concept, I think we have the starting concepts together and that’s what we presented today."
  • Senate Majority Leader Harry Reid said, "We only have 13 days — 13 days — and there's a number of Senators who said they'll do everything they can to stop the debt ceiling from being increased."  Reid has been working with Minority Leader Mitch McConnell on a modified Plan B.  Some portions of the "Gang of Six's" plan could be incorporated into McConnell’s fallback plan.
  • House Majority Leader Eric Cantor said, "While there are still portions that are unclear and need more detail, this bipartisan plan does seem to include some constructive ideas to deal with our debt."
  • President Obama said yesterday, "The good news is that today, a group of senators, the Gang of Six… put forward a proposal that is broadly consistent with the approach that I’ve urged.  What it says is, we’ve got to be serious about reducing discretionary spending, both in domestic spending and defense, we’ve got to be serious about tackling health care spending and entitlements in a serious way, and we’ve got to have some additional revenue so that we have an approach in which there is shared sacrifice and everybody is giving up something."  Obama called congressional leaders back to the White House again today to "start talking turkey" about what components could pass by August 2.  Obama said, "The problem we have now is we’re in the eleventh hour. . . and we don’t have a lot more time left."
  • Today, White House Press Secretary Jay Carney suggested that President Obama might support a short-term debt ceiling increase in order to give Congress time to finalize details of a long-term plan.  Carney said, "The president does not support a short-term extension of the debt limit, period.  The only exception to that is in the event that both sides reach a deal on a long-term extension of the debt limit plus significant deficit reduction, and we needed a very short-term extension, like a few days, to allow a bit of extra time for a bill to work its way through the legislative process."  Carney acknowledged "overwhelming odds," but insisted it was still possible to move a big deal through Congress before August 2.  Carney said, "There is still time to do something significant, especially if all the parties are willing to compromise.  I'm not laying bets that it’s going to happen.  But it would be a failure of leadership not to try just because the odds are overwhelmingly against it."
  • Last night, the House voted 234-190 to pass the "cut, cap and balance" plan that would impose strict caps on all future federal spending while making it harder to raise taxes.

TAX BILLS INTRODUCED JULY 19TH:

1.[112nd] H.R.2585 : To require that fees for services provided by the Internal Revenue Service be deposited in the Treasury as general receipts.
Sponsor: Rep Olson, Pete [TX-22] (introduced 7/19/2011) Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 7/19/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

2. [112nd] H.R.2592 : To amend the Internal Revenue Code of 1986 to increase the limitation on the amount of charitable contributions of ordinary income property taken into account in determining the charitable contribution deduction for any trade or business.
Sponsor: Rep Schock, Aaron [IL-18] (introduced 7/19/2011) Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 7/19/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

3. [112nd] H.RES.357 : Providing for consideration of the bill (H.R. 2553) to amend the Internal Revenue Code of 1986 to extend the funding and expenditure authority of the Airport and Airway Trust Fund, to amend title 49, United States Code, to extend the airport improvement program, and for other purposes.
Sponsor: Rep Webster, Daniel [FL-8] (introduced 7/19/2011) Cosponsors (None)
Committees: House Rules
House Reports: 112-155
Latest Major Action: 7/19/2011 Placed on the House Calendar, Calendar No. 54.

4. [112nd] S.1387 : A bill to amend the Internal Revenue Code of 1986 to extend the funding and expenditure authority of the Airport and Airway Trust Fund, to amend title 49, United States Code, to extend the airport improvement program, and for other purposes.
Sponsor: Sen Rockefeller, John D., IV [WV] (introduced 7/19/2011) Cosponsors (2)
Committees: Senate Finance
Latest Major Action: 7/19/2011 Referred to Senate committee. Status: Read twice and referred to the Committee on Finance.

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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