–Senate Majority Leader Says Senate Is ‘Obligated’ To Pass Key Items
–House Continues To Refine Tax Extenders Bill
–‘We’ll Have 60 Votes’ To Pass Extenders Bill

By John Shaw

WASHINGTON (MNI) – Senate Majority Leader Harry Reid said again
Wednesday that the Senate will not leave for the Memorial Day recess
until it passes both a war spending bill and a tax extenders package.

Speaking at a briefing, Reid said passage of both bill this week is
urgent.

“We’re not going to leave here,” until the two measures are
approved, Reid said.

“We’re obligated to do those two things,” he added.

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.

Reid said that once the House passes its tax extenders package the
Senate will take it up. He said that when the package hits the Senate
floor it will have strong support.

“We’ll have 60 votes,” Reid said.

The House is set to consider a $192 billion package of tax cuts and
benefit extensions that was unveiled last week.

Republicans and some Democrats have noted that the tax extenders
package would increase the deficit by $134 billion over 10 years.

The package before the House 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. 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.

Some House Democrats are urging the $192 billion package be scaled
back so that it is much less costly.

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

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