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Work on Budget Resolution Continues; Mark Up Dates for Tax Bill May Change

Thursday, May 22, 1997

OnLine

The Senate continued slogging through the budget resolution late today, but Congress still plans to complete work on the measure before the Memorial Day recess. The House already passed the measure.

House and Senate leaders have been meeting privately to work out the differences on the resolution in order to avoid having to hold a formal House-Senate conference. None of the differences are considered major.

It is important to remember that the budget resolution outlines the spending and revenue-raising goals for the upcoming fiscal year. Work on legislation to implement the precise policy changes assumed by the resolution will begin in June when the House Ways and Means Committee and the Senate Finance Committee mark up a tax bill.

The House-passed version of the resolution calls upon the Ways and Means Committee to mark up a tax bill by June 13, and the Senate version calls upon the Senate Finance Committee to mark up the bill by June 27.

The deadlines for the mark ups may change for several reasons.

Ways and Means Chairman Bill Archer, R-Texas, complained that his panel is scheduled to act two weeks before the Finance Committee, congressional sources said.

Archer does not want to sit and wait while critics attack his bill during the two-week period, so he either wants the option of delaying his mark up until June 20 or pushing the Finance Committee deadline back to June 20.

Also pushing for a delay, some committee chairmen in the House have complained that the budget resolution does not give them sufficient time to complete work on their portions of the reconciliation bill, congressional aides said. House Speaker Newt Gingrich, R-Ga., said concerns about the reconciliation bill’s timing may force congressional leaders to delay markup deadlines for all committees, including the tax-writing panels.

House Ways and Means Committee Democrats sent a letter to Archer expressing concern that the capital gains relief contained in the tax bill will not help the real estate industry.

"We are particularly concerned about proposals that would limit the scope of any capital gains tax reduction by revising the depreciation recapture rules that apply to real property," the letter said.

Housing Credit Changes Supported: The Ways and Means Oversight Subcommittee released a report May 22 endorsing most of the General Accounting Office’s recommendations to improve the administration of the low-income housing credit.

"There is a need to improve the monitoring of enforcement and compliance, and several recommendations could be achieved without legislative action," the report said. In the report GAO said that requiring independent verification, annual state monitoring reports, habitability inspections, determination of state compliance with credit ceilings, and an estimate of tax credit compliance were needed to deter fraud and abuse of the housing credit.

The GAO report included several additional recommendations for the administration of the program. Families with children and the preservation of existing housing should have preferential treatment in the allocation of the credit.

The IRS’s reasons for overriding the funding of certain priority projects should be disclosed publicly, and state agency fees should be limited to no more than the actual costs incurred by a state agency in administering the program.

The Subcommittee expanded on two of the GAO’s recommendations. First, the subcommittee recommended that state monitoring provisions be changed to require regular visits and enforcement of habitability requirements, and second, it recommended penalizing states that over-allocate their share of credits by reducing the amount from the following year’s credits.

The report rejected the GAO’s recommendation to incorporate the program "in the definition of federal financial assistance included in the implementing guidance for the Single Audit Act."

JCT Issues Documents On D.C. Tax Relief: The Joint Committee on Taxation issued two documents on the President’s tax relief proposals for the District of Columbia: written testimony of chief of staff Ken Kies on tax relief proposals (JCX-15-97) and his oral statement (JCX-15-97).