Tax Analysts Blog

No Happy New Year for Dysfunctional Congress

Posted on Dec 16, 2009

As I write this the estate tax is 15 days away from expiring and the Finance Committee Chairman is on the Senate floor pleading for a unanimous consent agreement to avoid the "massive confusion" that will ensue if a temporary extension of the tax is not granted. The Republican leader--holding all the cards and fond of the idea of the tax expiring--did not consent.

So now Chairman Baucus is left with no option but to seek retroactive extension of the estate tax when Congress reconvenes early next year. Politico ("Congress Punts Problems to 2010") says "this is an extraordinary failure for the White House and Democrats." Absolutely, but foot-dragging Republicans deserve some blame too.

Over on the House side Democratic leaders were forced to settle for a mere two-month extension of the debt limit. The New York Times cites "a shortage of time and an abundance of disagreement" as the main problem. Before adjourning for the holidays today the House is also likely to pass a $150 billion jobs bill. But the Senate will not act on that until next year.

Then there is the bill that would extend popular expiring tax provisions. This legislation has broad bipartisan support, but like everything else it too is in limbo. There will be no action this year. A retroactive extension must be enacted some time in 2010.

This backlog of legislation is all due to the inability of the Senate to move on health care. All the king's horses and all the king's men are trying to put health care reform together again, and there is no time for anything else. Even if some form of health care reform does pass, it will not be approved by the full Congress until next year. And it is not likely to be pretty, as Michael Gerson points out in his biting commentary ("Butchering Reform") in today's Washington Post. Without the blah-blah partisanship that infects most op-eds, Gerson vivisects Congress with words it so richly deserves:

    [A]ll these deceptive burdens, risky moves, budget tricks, tax increases and new bureaucracies have been thrown together to meet a political deadline, with little clear idea of how they would affect the health of the nation. Sometimes brain surgery is necessary, but this one is being conducted by moonlight with pruning shears and chicken wire.
For Congress everything is piling up--almost absurdly--like all those Chicago police cars in the great chase scene at the end of The Blues Brothers. Congress has one hell of a mess to clean up next year before it even begins dealing with deficit reduction and the partial extension of the Bush tax cuts. Chairman Rangel in the House and Chairman Baucus in the Senate have called for major tax reform in 2010. Who are they kidding?

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