–Senate Majority Leader: No Recess Until Key Bills Are ‘Complete’
–Sen. Reid: Must Press Ahead With Key Spending, Tax Bills

By John Shaw

WASHINGTON (MNI) – Senate Majority Leader Harry Reid said Tuesday
that the Senate will not leave for its Memorial Day recess until it
finishes work on a war spending bill and a tax extenders package.

“We’re going to work until we complete,” the two bills, Reid said
at a briefing after a luncheon with Senate Democrats.

Reid said the Senate will continue to work on the emergency
spending bill which is now under debate in the Senate.

The Senate is now debating a $59 billion supplemental spending bill
in which about $33 billion is allocated for operations related to
Afghanistan and Iraq. Among other things, these funds will be used for
the president’s expansion of 30,000 additional American troops in
Afghanistan as well as some reconstruction funds.

The bill partially funds the president’s request of $118 million
for the Gulf of Mexico oil spill and some relief monies for Haiti. It
also allocates $5 billion for FEMA to replenish its funds to deal with
natural disasters.

The bill also includes $13 billion in mandatory funds to compensate
Vietnam veterans exposed to Agent Orange.

Democratic senator Tom Harkin has said he will try to add $23
billion in aid to states to avoid the layoffs of hundreds of thousands
of teachers.

Republican senator Kay Bailey Hutchison is expected to offer two
border security amendments soon, including one which would deploy 6,000
National Guard troops to the Southwest border.

Republican senator Tom Coburn has said that he will offer an
amendment that would require the package to be offset.

Reid said that he expects the House to consider Wednesday a $192
billion package of tax cuts and benefit extensions that was unveiled
last week.

Reid said the Senate should take up the bill this week after it is
approved by the House.

The package would extend about a dozen tax cuts that expired at the
end of last year, expand unemployment benefits, health insurance
subsidies for unemployed workers, and provide Medicaid funds to the
states.

Only about $60 billion of the package would be offset and some of
these offsets are controversial. For example, the package changes the
treatment of carried interest earned by private equity fund managers,
venture capitalists, and real estate investors.

Under the plan, instead of being considered as capital gains, 75%
of their carried interest would be treated as ordinary income for tax
purposes. Only the remaining 25% would be taxed as capital gains.

** Market News International Washington Bureau: (202) 371-2121 **

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