Yesterday, by a vote of 225-200 the House passed Estate Tax legislation (HR 4154). During the Bush administration, the estate tax had been gradually reduced and was scheduled to expire January 1, 2010, but would bounce back in 2011 to pre-2001 estate tax rates of 55% and a per-person exemption of $1 million. The legislation passed today would make permanent the current 45 percent estate tax rate and the current per-person exemption amount of $3.5 million. The bill would also add pay-as you-go budget principles to law, requiring new tax cuts or mandatory spending to be offset.
In the Senate, the bill faces an uncertain future for several reasons. Many in the Senate favor lower estate tax rates and the Senate is currently preoccupied with health care legislation overhaul. It is possible that there could be a one or two year extension of the current rates, giving Congress more time to consider a permanent restructuring of the estate tax system. If a short term extension is the route that is taken, it is likely to be added to the year end omnibus spending bill that is expected to be considered later this month.
Troubled Asset Relief Program (TARP)
Wednesday afternoon, by a vote of 421-0 the House passed legislation that would implement additional monitoring and accountability of the Troubled Asset Relief Program (TARP) (HR 1242). The Treasury Department, which oversees the TARP program, would be required to provide constant data on money spending under the bailout to the TARP special inspector general, the comptroller general and the Congressional Oversight Panel. This would be accomplished through a standardized electronic database system.
Financial Services Overhaul
The House Financial Services Committee approved several measures Wednesday afternoon that have paved the way for consideration of the more inclusive proposed financial services overhaul bill for next week. Legislation designed to curtail economic risks posed by the failure of major financial intuitions (HR 3996) was one such measure approved. The measure would create a council of federal regulators who would monitor the financial system for companies that have become so large or so interconnected that their failure threatens the economy. The council would have the authority to impose stricter standards on such companies and even if necessary dissolve them.
In addition, the committee passed an insurance measure (HR 2609) that would create a federal insurance office to advise the Treasury Secretary on major domestic and prudential international insurance policy issues, including all lines of insurance except health insurance. The office would have the authority to gather industry data, identify gaps in insurance regulation and recommend ways to enhance regulation of insurance companies that may be a risk to the economy.
The financial overhaul package is scheduled to go to the Rules Committee on December 8 and will be on the floor by December 9 as a single bill. Chairman Barney Frank (Mass) has asked for at least three days of debate.