Senate Finance Committee Chairman Max Baucus (D-MT) is facing opposition from members of his own committee after suggesting that health care reform may include new taxes on health benefits. Baucus proposed taxing benefits on a sliding scale based on income in a white paper. Director of the Office of Management and Budget Peter Orszag recently indicated that the administration may support such a proposal. Opposition includes Health Subcommittee Chairman Jay Rockefeller (D-WV) who said this week, "We should not add to [workers'] worries by jeopardizing their health care coverage." Baucus is in the midst of constructing his legislation and has not yet released a detailed plan containing changes to the tax code. Though Sen. John McCain (R-AZ) was roundly criticized when he discussed taxing benefits on the campaign trail, Baucus may look to McCain and other Republicans for support.

The Department of Labor issued model letters for employers to notify terminated employees of their rights to continuing health benefits under the recently passed American Recovery and Reinvestment Act (ARRA). The ARRA included a complex federal temporary subsidy for COBRA health premiums that terminated employees can elect. Please read Printing Industries' "ARRA COBRA Provisions Summary" for more information about employers' responsibilities under the new law.

The House and Senate Budget Committees this week revealed their separate plans to govern federal government spending for 2010. Both appear to be scaling back President Obama's more ambitious proposal released in February. Senate Budget Committee Chairman Kent Conrad (D-ND) released a plan that contains less government spending than the Obama plan and requires the various environment and health care committees to submit deficit-neutral plans for climate change and health reform proposals. Conrad extends the Alternative Minimum Tax "patch" for at least three years but does not extend Obama's "Making Work Pay" credit for individuals past 2010. The House plan put forth by Budget Chairman John Spratt (D-SC) also includes deficit-neutral reserve funds for health care and climate change. The House, however, includes controversial reconciliation instructions for health care reform, which would circumvent the need for a super-majority vote in the Senate. However, the provision is not in the Senate budget, which could lead to difficult negotiations as the chambers work to create a single bill.

Following a similar letter last week to President Obama, the executive leadership of the Tax Relief Coalition wrote an open letter to Congress calling on lawmakers to reject tax increases contained in the 2010 Budget. The plan put forth by the White House contains a number of provisions that would raise taxes on small businesses and lead to increased energy costs via a carbon cap-and-trade program. The letter states concerns that Obama does not fully identify how government will pay for new initiatives, noting that the plan calls for Congress to identify "additional resources." It is likely that these additional resources could be new taxes or fees.

This week, the Blue Dog Democrat Coalition wrote House Budget Committee Chairman John Spratt (D-SC) urging him not to include repeal of the last-in first-out (LIFO) accounting rules in the House budget plan. President Obama included a repeal of this commonly used accounting standard that raises over $60 billion in revenue for the federal government in his 2010 Budget. The Blue Dogs note that repeal could force American companies "to eliminate jobs or ship them overseas at a time when our country can ill-afford it."

Printing Industries, as a member of the Government Withholding Relief Coalition, submitted comments to the IRS in anticipation of an April 16 hearing regarding implementation of the 3 percent withholding requirement. The withholding requirement is currently scheduled for implementation after December 31, 2011, and the IRS is in the midst of the regulatory process. The coalition requests time to speak to IRS commissioners during the hearing and further requests that the hearing consider a number of important issues regarding construction of the final rule governing withholding.

This week Printing Industries submitted comments regarding which products should be subject to phthalate requirements of the CPSIA. The comments are in response to the Federal Register notice of March 23 and the Consumer Product Safety Commission (CPSC) meeting held March 12. Printing Industries is currently working on comments regarding CPSIA requirements that children's products must contain permanent distinguishing marks on the product and packaging that provide certain identifying information. For more information on the CPSIA and steps printers should take to comply with the law, please visit www.printing.org/cpsia.

As expected, the Senate Budget Committee issued a plan that did not include reconciliation provisions for climate change cap-and-trade legislation. Reconciliation instructions could have allowed the legislation to pass by a majority vote in the Senate where 60 votes are usually required to overcome a filibuster. Moderate Senators from both parties expressed their opposition to subverting standard Senate operating procedures to pass a carbon cap-and-trade program. This week in the House, the Blue Dog Democrat Coalition stated their opposition to the use of reconciliation in their guidelines for the 2010 budget. Also in the House this week, union and business officials expressed their opposition to cap-and-trade at a hearing before the House Ways and Means Trade Subcommittee. Both groups noted that increased energy costs would decrease industrial employment as jobs moved to countries that lack cap-and-trade legislation.

Postmaster John Potter appeared this week before the Government Oversight and Reform Subcommittee on the Postal Service to discuss USPS efforts to adjust to reduced mail volume. This week USPS announced that 150,000 employees will be offered early retirement, it will close six district offices across the country, and make other cuts that could save $300 million a year. Potter also answered critics who have recently attacked USPS executive pay saying that reports had misstated his yearly pay and that he does not expect to receive a bonus this year.

On Monday the San Francisco Board of Supervisors City Operations Committee held a hearing on the resolution to encourage the State of California to pass "do not mail" legislation. Approximately 40 speakers addressed the board with an even number speaking for and against the resolution. Despite a strong effort from postal employee representatives, other union representatives, printers, and small businesses, the Committee voted in favor of moving the proposal to the Board of Supervisors which will hear the issue next week, March 31. While the result is disappointing, it should be noted that the only committee members present were the sponsor and co-sponsor of the resolution. Printing Industries of America, Printing Industries of Northern California, and the Mail Moves America Coalition are reaching out to Supervisors to explain the value of direct mail to the local and national economy. Thank you to the Printing Industries of California that last week wrote to Supervisor Michela Aliota-Pier, a member of the committee, urging her vote against the resolution.

With Congress tackling financial legislation, health care reform, and possibly climate change legislation, it appears to be unlikely that comprehensive immigration reform will be on the agenda. While President Obama met with members of the Congressional Hispanic Caucus this week to discuss proposals, Republican Whip Jon Kyl (R-AZ) indicated his opposition. Kyl stated that, "If you've picked any subject that isn't really on the front burner right now, you've picked it," when questioned about whether reform would come before the Senate Judiciary Committee on which he serves.

Former Washington Gov. Gary Locke (D) was confirmed this week as Secretary of Commerce, filling a position that had seen two previous candidates step aside before confirmation hearings. Locke faced little opposition and was approved by voice vote. Previous candidate Gov. Bill Richardson (D-NM) stepped down because of a continuing investigation while Sen. Judd Gregg (R-NH) refused the nomination over policy differences with the administration.

Jim Tedisco (R) and Scott Murphy (D), candidates for the Congressional seat formerly held by Sen. Kirsten Gillibrand (D), met in a debate on Wednesday night. Tedisco is touting his experience in the state legislature and long service to New York. Murphy clearly stated his support for the recent stimulus bill and maintained that it would bring jobs to the district. The March 31 election is being pitched as a test of the Obama administration's economic policies-with Tedisco attacking the stimulus, bailouts, and AIG bonuses-and an early indicator of 2010 voting trends.

Sen. Norm Coleman (R) and Al Franken (D) continue to await a ruling from the Minnesota state court regarding the outcome of the fall election. As the court challenges continues, the Federal Election Commission modified fundraising rules to allow both candidates to raise further funds to support legal expenses. The case could remain in court should either side appeal the ruling of the three-judge state panel currently under deliberation.

Gov. Arnold Schwarzenegger (R) set May 19 as the date for a primary to replace the seat vacated by Labor Secretary Hilda Solis. State Sen. Gil Cedillo (D) and Board of Equalization Chairman Judy Chu (D) are in a heated primary for a seat which heavily favors Democrats. At this time, a Republican candidate has not come forward.