Senate majority leaders have stated they expect to complete a Senate vote by the end of 2009, which would lead to an early 2010 House-Senate conference to hammer out differences in each chamber's version of health care legislation. However, many obstacles must first be overcome. Senate Majority Leader Reid is still awaiting scoring from the Congressional Budget Office (CBO) on draft legislation and has promised his conference he will not take up a bill without first receiving the cost analysis. Once the CBO score is received, the majority may need to make adjustments to trim the cost and request a second score. Additionally, Senate procedure requires 60 votes to block a filibuster and move to consideration of a bill. Currently, all 40 GOP Senators have indicated they cannot support legislation expected to be introduced. This would mean that all 58 Democratic Senators and two Independent Senators would need to vote in favor of considering the majority bill. To date, Sen. Lieberman (I-CT) has publicly stated he will not vote for the bill. The abortion debate also threatens to delay Senate action as the upper chamber must contend with a pro-life amendment passed by the House that has infuriated abortion rights activists.

The U.S. House Armed Services Committee's Panel on Defense Acquisition Reform recently held a hearing focused on contractors and taxes. While the law (P.L. 109-222) mandating that federal, state, and local governments withhold three percent from payments for goods and services (effective 2011) was not explicitly mentioned, tax compliance by contractors was discussed. Printing Industries and other members of the Government Withholding Relief Coalition urged Chairman Andrews (D-NJ) and Ranking Member Conaway (R-TX) to recommend repealing the onerous three percent law in the panel's final report. Printing Industries-supported legislation H.R. 275 (Meek/Herger) and S. 292 (Specter) would repeal the far-reaching requirement, inserted as a last-minute revenue raiser.

Committee on Ways and Means Chairman Rangel (D-NY) announced last week that estate tax legislation will be put on the back burner until healthcare legislation moves through the U.S. House. Now that the healthcare bill has passed, and with January 2010 when the estate tax will be repealed-quickly approaching, the estate tax and tax extenders debate is heating up in the House. Last week, Printing Industries, as a member of the Family Business Estate Tax Coalition, thanked Reps. Berkley (D-NV), Brady (R-TX), Davis (D-AL), and Nunes (R-CA) for introducing the Estate Tax Relief Act of 2009 (H.R. 3905). The bill would phase-in the estate tax exemption levels over ten years to $5 million while also decreasing the tax rate to 35 percent. This particular adjustment of exemption levels and rates, if indexed for inflation and made permanent, would relieve approximately 80 percent of family-owned printers from both the destructive planning and payment of the estate tax. 

With lawmakers heavily focused on the rate and exclusion, Printing Industries and allies in the S-Corporation Association continue to remind Congress that the tax base matters too, especially to closely held businesses attempting to survive from one generation to the next. In a letter October 29, Printing Industries highlighted concerns with Rep. Pomeroy's (D-ND) legislation (H.R. 436) that may be considered in the estate tax debate. Specifically, the bill would prohibit taking lack of control into account, and perhaps lack of marketability too, when establishing the fair market value of closely held business assets if those assets are transferred to family members. As a result, two identical closely-held businesses would see their value-and resulting tax burden-differ by 30 percent or more for the sole reason that one business was owned by a family while the other business was owned by unrelated parties. Printing Industries and the Family Enterprise Coalition are making progress educating lawmakers on why taxing estates with family-owned businesses more than non-family businesses is bad tax policy.

On November 6, 2009, President Obama signed into law (Public Law 111-92) the Worker, Homeownership, Business Assistance Act (HR 3548), which included Net Operating Loss (NOL) tax relief. This temporary relief will allow struggling companies to get quick cash refunds from the IRS by using either their 2008 or 2009 losses to offset taxes paid in the past five years. This temporary tax relief is available to all size companies. There is a temporary limit in year five of the carryback: any refunds for taxes in the prior fifth year would be reduced by 50%. There is no limit in the refunds for taxes paid in the fourth, third, second, or first year of carryback. Printing Industries of America, with the help of many member companies, fought a vigorous campaign to secure passage of this important tax provision. For more details about the new NOL tax law, including its impact on multinational companies, financial statements, consolidated returns, etc., see pages three and four of the Deloitte explanation of the new law.

On Thursday, November 5, 2009, the Federal Workforce, Postal Service, and the District of Columbia Subcommittee held a hearing to examine revenue-generation initiatives recently undertaken by the Postal Service in order to further address the agency's ongoing financial challenges. A panel of witnesses testified to potential revenue opportunities and discussed revenue generating ideas used by foreign postal services. To view testimony, click here.

Last week, House Education and Labor Chairman Rep. George Miller (D-CA) introduced new legislation to mandate paid leave in response to pandemic flu concerns. H.R. 3991, the "Emergency Influenza Containment Act," would require all employers with 15 or more full- and/or part-time workers to provide five days of paid sick leave during a 12-month period to workers who have been directed to stay home due to demonstrating symptoms of a contagious illness or have been in close contact with an individual with such symptoms. Employers who already provide five or more paid sick days would be exempt; however, the bill does not define Paid Time Off as sick leave. Other provisions are equally murky, and Printing Industries is providing input to the Committee to modify this proposal. It is important to note that this bill is separate and apart from the Healthy Families Act (S. 1152/H.R. 2460), which seeks to mandate paid sick leave. The House Committee is scheduled to hold a hearing on the bill next week.

U.S. House: CA-10

John Garamendi (D) won in last week's special election against Republican opponent David Harmer. Garamendi will succeed Rep. Ellen Tauscher (D) who stepped down earlier this year to serve as the Undersecretary of State for Arms Control and International Security in the Obama Administration. 

U.S. House: IL-07

Rep. Danny Davis (D) announced he will seek an eighth term in the House rather than run for Cook County Board President. Davis said he came to his decision because three other black candidates would have been working from the same pool of voters in the Cook County board race. Several Democratic Candidates filed to run for the House, but many of them had said they would drop out if Davis sought re-election. Davis currently serves on the House Oversight & Government Reform and Ways & Means Committees, and is a long-time staunch advocate of the printing industry in relation to postal reform issues. Rep. Davis was a 110^th Congress Friend of Print award recipient.

U.S. House: NY-23

Attorney Bill Owens (D) beat Conservative Party candidate Doug Hoffman (C) by 49% to 45% in last Tuesday's special election to succeed former Rep. John McHugh (R). Candidate Dede Scozzafava (R) dropped out of the race late Sunday night and endorsed Owens.