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US House Democrats Set For Quick Action On Drug, Oil Bills January 3, 2007

Posted by notapundit in Congress, Politics, US News.
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WASHINGTON (Dow Jones)–U.S. House Democrats begin Thursday their effort to quickly pass legislation increasing the federal minimum wage, repealing a tax break for oil producers, and allowing government negotiation of Medicare drug prices.

Incoming House speaker Nancy Pelosi, D-Calif., has said she wants the bills passed by the House before President George W. Bush gives his State of the Union address later this month.

The proposals are all part of the “Six for ’06” on which Democrats campaigned last summer in the run-up to fall’s federal elections.

In those elections, Democrats won majority control of the House of Representatives and the Senate.

In an opinion piece Wednesday in the Wall Street Journal, Bush said he intended to work with Democrats this year. But none of his goals for 2007, except for one item dealing with Congress’ earmarking of federal spending for specific programs, overlapped with the Democrats’ agenda.

Pelosi announced her legislative plans to fellow Democrats last month.

“I hope you will join… in co-sponsoring this vital legislation to make the American people safer, make our economy fairer, make our Congress more honest, and build a better future for all of America’s children,” Pelosi wrote in a letter to fellow Democrats.

Bush has said he would sign a minimum wage increase if it also included tax breaks and an easing of work place regulations for smaller businesses.

Democratic committee and leadership aides said House Democrats won’t include such extraneous measures.

Senate Democrats have also signed onto the Six for ’06 agenda, but have set no timetable for action. Incoming Senate Finance Committee chairman Max Baucus, D-Mont., has said he will try to act quickly on the minimum wage increase, but that for the bill to have any realistic chance of passing in the Senate it will include tax and regulation provisions.

In the first 100 hours of the new congressional session, House Democrats will also seek to repeal a tax break for oil and gas producers inserted into a foreign trade tax bill in 2004. The 2004 act repealed a tax subsidy for companies trading overseas. That tax subsidy had been ruled illegal by the World Trade Organization.

Replacement benefits were provided to companies losing the subsidy, but oil and gas producers, while not part of the original trade subsidy regime, were also added.

According to a House Democratic committee aide, the bill would repeal that break, raising from $5 billion to $6 billion in tax revenue over the next decade.

To raise roughly another $1 billion, the legislation would also increase the period of time over which larger oil and gas producers could write off their geological and geophysical expenses from 5 years to 7 years.

Also on Democrats’ short list for quick action is legislation cutting interest rates for student loans awarded based on financial need. Democrats initially had proposed cutting interest rates for all students, but pared back the proposal to reduce its cost.

Under legislation enacted last year, the excess of interest paid on student loans over the guaranteed minimum rate of return to lenders is returned to the government. Cutting in half the interest rate paid by all students borrowers would have reduced the government’s returns by as much as $18 billion over 10 years.

Democrats still haven’t said how they intend to pay for the remaining cost of their proposal, which some industry experts have estimated would instead cost well below $10 billion.

On Friday, Democrats do plan to amend House rules to require that the cost of legislation cutting taxes or increasing entitlement spending be matched by a tax increase or similarly sized cut in other government spending.

They will also follow a Republican proposal from 2006 requiring a list of which lawmakers had asked to earmark spending in the various appropriations bills.

In his opinion piece Wednesday, Bush asked Congress to cut back on the amount of earmarking it does, leaving it to the executive branch where to spend federal dollars.

A number of items in the Democrats’ Six for ’06 agenda, however, won’t receive immediate consideration.

Those items include legislation promised by Democrats last summer to end “tax giveaways that reward companies for moving American jobs overseas” and to make permanent a personal income tax deduction for tuition expenses.

Democrats have also not yet decided how they will make good on their campaign pledges to increase incentives for personal savings and how to cut back on Medicare subsidies for health maintenance organizations.

Also unclear is how Democrats plan to make good on their Six for ’06 promise to “enact real pension reform to protect employees’ financial security from CEO corruption and mismanagement, including abuse of the bankruptcy laws.”

At a press conference laying out his agenda for the year, incoming House Education and Workforce Committee chairman George Miller, D-Calif., said that would be part of a larger discussion.

“We’re going to examine the larger question of whether or not the Congress has done what is necessary… to make sure that people’s pension assets… are as secure as they can be,” Miller said.

In addition to this and other newswires, Dow Jones publishes The Wall Street Journal and its international and online editions, Barron’s, the Far Eastern Economic Review, MarketWatch, Dow Jones Indexes and the Ottaway group of community newspapers. Dow Jones owns Factiva and co-owns SmartMoney with Hearst Corp. It also provides news content to CNBC television operations worldwide and to radio stations in the U.S.

By John Godfrey, Dow Jones Newswires

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