Capital Corner:  The Ayes of March

Jim Brandenburg, CPA, MST, Shareholder - Tax   email | bio
March 2010

Following the surprising victory of Scott Brown in Massachusetts, efforts on health care reform seemed to have moved to the back burner. In its place have been proposals aimed at creating jobs and lifting the struggling economy. However, too much political capital has been invested in health care reform over the past year to just let it die. While a jobs bill is in progress, the administration and congressional leaders are making another major push to enact health care reform this year. With health care reform and a jobs bill center stage, consider the following while the excitement in March unfolds.

Health Care Reform in Congress

After the health care summit, health care reform legislation moved to more familiar territory within Congress. Since no consensus was reached as a result of the summit, congressional leaders may seek reconciliation to move the legislation. This approach is somewhat of a misnomer. In reconciliation, both parties do not resolve their differences; rather this process will permit the health care reform bill to move forward with only 51 "ayes" (yes votes). A 60 vote majority (needed to break a filibuster) is not required under reconciliation. A number of senators are uneasy about adopting the reconciliation strategy and bypassing normal Senate procedures, and others are concerned about possibly alienating voters in the fall. Some supporters of the bill feel if they do not pass health care reform legislation now it may not get accomplished at all, and the reconciliation window is closing fast.

Jobs Bill in Congress

With 2010 being an election year, Congress will strive to enact legislation aimed at creating jobs and assisting employers. A jobs bill was recently introduced with bipartisan support that would provide tax credits for employers to add new employees, expand payrolls and assist businesses. Shortly after this proposal was introduced, Senate Majority Leader Reid surprisingly unveiled his own smaller proposal. Reid's bill contains new jobs credits for employers, an extension of the $250,000 Section 179 expensing rules through 2010 and expanded reporting and penalties for foreign bank and investment accounts. Senator Reid was able to secure enough ayes in the Senate to move his proposal to the House for legislative action. There seems to be some consensus in Congress to pass a jobs bill sooner rather than later; it is just uncertain what the size of the overall legislation will be.

Look for both of these issues (and possibly others) to receive much of the legislative attention in the coming weeks. It will be March Madness of a different sort. Stay tuned . . .