Capitol to Capitol
An Information Service of NCSL's Standing Committees

Volume 17   Issue 38 - December 20, 2010


The president signed the $858 billion tax cut/unemployment insurance bill (H.R. 4853) on Friday, Dec. 17. Earlier in the week the Senate and House passed the measure by a vote of 81-19 and 277-148, respectively. The compromise, originally negotiated between the White House and Senate Republicans, will provide a two-year extension of current federal income tax rates, extend unemployment insurance benefits for 13 months, and decrease the Social Security payroll tax from 6.2 percent to 4.2 percent for employees for one year. Before the final vote in the Senate, lawmakers considered and subsequently rejected three amendments, including a proposal by Senator Tom Coburn (OK) to pay for the extension in unemployment benefits. The other proposed amendments included extending the tax cuts permanently introduced by Senator Jim DeMint (SC), and eliminating tax cuts for the wealthiest 2 percent of Americans introduced by Senator Bernie Sanders (VT). In the House, lawmakers considered changes to the Senate plan, specifically regarding the estate tax proposal. The Senate bill proposed that the amount exempt from the estate tax, which has temporarily expired, be increased to $5 million, with a tax rate of 35 percent. House Democrats unsuccessfully offered an amendment to extend the estate tax at its 2009 rate of 45 percent, with an exemption up to $3.5 million. Without action, the exemption level would have been reduced to $1 million with a tax rate of 55 percent. NCSL has a summary of the legislation, at (NCSL staff contacts: Michael Bird, Jeff Hurley [taxes generally], Michael Reed [unemployment])


Late last week Senate plans for an omnibus bill to fund the federal government for the remainder of the fiscal year stalled because of concerns over increased spending, especially the $8 billion in earmarks for members of Congress. Majority Leader Harry Reid (NV) had hoped to supplant a House-passed continuing resolution with an amendment totaling $1.108 trillion for domestic discretionary spending. This inaction forced Congress to pass and the president to sign a three-day extension (H.R. Res. 105) of the current continuing resolution, which was set to expire on Dec. 18, to avoid a government shutdown. The Senate is now ready to introduce legislation to fund the federal government until March 4, a measure that would support most programs at FY 2010 levels. Programs that may receive funding boosts include the National Telecommunications and Information Administration, Pell Grants, and the Low-Income Home Energy Assistance Program, to help with the extra costs that occur during winter.  Current funding levels for FY 2011, will be revisited in the coming months as Congress looks to reduce spending to 2008 levels. (NCSL staff contacts: Michael Bird, Jeff Hurley)