Congress departed for a two-week recess Friday after accomplishing almost nothing in the past month and reaching a level of partisan fighting that threatens to derail passage of several important bills before the session ends in December.
Among the legislation hanging in the balance: a bill to “patch” the Alternative Minimum Tax to avoid adding thousands of dollars to the tax bills of 21 million middle- and upper middle-class Americans.
Republicans this week blocked an effort by Democrats to pass a one-year “patch” to postpone the expansion of the AMT. The AMT was designed to ensure that the very rich do not escape paying taxes, but it was never indexed to inflation and unless it’s adjusted, it will ensnare a huge group of middle- and upper middle-class Americans next year.
The Democrats’ proposal also would have extended Bush administration tax cuts made in 2001 and 2003 that include marriage-penalty relief and the $1,000 child tax credit.
Republicans balked, however, when Democrats said the bill would require raising unspecified taxes to pay for the extensions.
“We’re going to do AMT before the end of the year,” Senate Majority Leader Harry Reid, D-Nev., promised Friday. But Reid said he is committed to paying for at least part of the bill, which means Democratic proposals would include tax increases that many Republicans would oppose.
The Senate is set to return the week of Dec. 3.
The Internal Revenue Service warned Congress that delaying an AMT “fix” until mid-December could delay more than 20 million tax refunds because the agency will have to print revised forms that reflect the new taxlaws.
The Senate on Friday also rejected two plans to provide a portion of the $196 billion in supplemental war funding for Iraq that President Bush requested this year.
A Democratic-sponsored bill would have sent $50 billion with conditions requiring troop withdrawal within 30 days. A Republican bill would have provided $70 billion for the war with no strings attached. Both votes failed mostly along party lines, and now Democratic leaders say they may not take up an Iraq funding bill again until next year.
When Congress returns in December, it will also scramble to pass 11 appropriations bills in the form of an “omnibus” package that must meet Bush’s approval. Bush has objected to the cost of the bills.
