November 19, 1999- After a flurry of legislative activity, prompted mostly by partisan budget fights that kept this session going well past its scheduled adjournment date, Congress is ready to close out its year, but not before finishing one final piece of business.

Shortly before adjourning for 1999, the House late November 18 passed legislation by a 418 to 2 vote to extend several popular expiring and expired tax breaks (HR 1180), after also approving the five remaining budget appropriations measures. At press time, the Senate was expected to vote on the extenders bill by November 23, after it, too, passes the remaining budget spending measures. (On a procedural note, the House adjournment is contingent on Senate passage of the fiscal 2000 funding bills.)

Meanwhile, legislative action on a minimum wage increase coupled with a series of small business tax breaks appears dead for this session. Supporters of the proposal promise to renew action in the 2000 session.

Extension of Tax Credits
The extenders bill would be paid for only during the first two years, with the remainder paid for with the non-Social Security budget surpluses. The bill is estimated to cost more than $18 billion over 10 years, including nearly $3 billion in offsets. The extenders bill was attached to the Ticket to Work and Work Incentives Act, which ensures that disabled people will not lose their federal health coverage if they find a job.

According to a House Ways and Means Committee summary, the bill includes:

• a five-year extension of the research and experimentation tax credit to June 30, 2004
• a three-year fix of the Alternative Minimum Tax to December 31, 2001
• a two-and-a-half year extension of the work opportunity tax credit to December 31, 2001
• a two-year extension of the exception under Subpart F for active financing income to December 31, 2001
• a two-and-a-half year extension of the tax-free treatment of employer-provided education assistance to December 31, 2001
• A two-and-a-half year extension of the credit for electricity produced from wind and closed loop biomass, modified to include poultry waste, to December 31, 2001
• A two-year extension of the qualified zone academy bond proposal, a school construction bond, to December 31, 2001
• A two-and-a-half year extension of the welfare-to-work tax credit to December 31, 2001
• a two-year extension of the suspension of income limitation on percentage depletion to December 31, 2001
• a year extension for brownfields environmental remediation to December 31, 2000
• a two-and-a-half year extension that will increase the amount of rum excise tax covered over to Puerto Rico and the Virgin Islands to December 31, 2001

The measure also addresses two trade-related items, the Guaranteed System of Preferences and Trade Adjustment Assistance.

President Clinton had said he would not support the previous form of the extenders bill, but White House and congressional negotiators worked out a deal late November 16, which resulted in the current bill. Clinton is expected to sign the bill when and if it reaches his desk, according to a White House spokesperson.

Both Senate Minority Leader Thomas A. Daschle (D-S.D.) and Senate Majority Leader Trent Lott (R-Miss.) have said they hope the Senate will vote on the bill and adjourn over the weekend, precluding the need to return after Thanksgiving break, which runs from November 21 through 27.

House Ways and Means Committee Chairman Bill Archer (R-Tex.) said during floor debate that the extenders package returns a portion of an overpayment of taxes to citizens. "American taxpayers are paying too much and deserve their money back," he said.

Ranking committee member Charles B. Rangel (D-N.Y.) said extending the expiring tax breaks is a responsible action, but added that the previously vetoed $792 billion 10-year tax cut package would have complicated the tax code. He added that Democrats opposed the poultry waste provision.

Minimum Wage/Small Business Tax Cuts
The minimum wage bill (HR 3081) sponsored by Rep. Rick Lazio (R-N.Y.) still does not have enough votes to pass if it were to reach the House floor, according to an aide to Lazio. House Majority Leader Richard K. Armey (R-Tex.) has said that he will not bring the bill to the floor unless Lazio and other bill supporters can demonstrate that the bill has the votes to pass.

The bill contains about $30 billion in small business tax breaks over five years, proposed by Archer. The proposal would cost $95.7 billion over 10 years and would be paid for with non-Social Security surpluses. However, Clinton has said he would veto the measure, since it is not paid for.

The bill would, among other things, phase in a reduction in the top estate tax rate, accelerate the 100 percent health insurance deduction for the self-employed, increase and expand the low-income housing tax credit, and phase up the business meal deduction from 50 to 60 percent over two years.

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