Washington Watch - November 17, 2010

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Washington Watch - November 17, 2010

Editor's Note: Congress' Schedule For Nov/Dec

Congress returns this week to Washington, D.C. for the first time since the midterm elections. After nearly a month and a half of pre- and post-election leave, lawmakers will finish the rest of their legislative duties for 2010, with breaks for Thanksgiving and Christmas. This is called the "lame duck" session, since some members will not be returning for the 112th Congress in January.

The list of pending legislative action items includes agreeing on a 2011 budget and addressing various expiring tax provisions. These are likely to be taken up in the weeks after Thanksgiving. This week, the body is busy with new-member orientation and training workshops so that the 112th can get off to a productive start. 

Both parties will hold elections for key leadership posts today. John Boehner, R-Ohio, is expected to be elected as House Majority Leader and Nancy Pelosi, D-Calif., is running for the position of Minority Leader. The Senate yesterday elected Harry Reid, D-Nev., as Majority Leader and Mitch McConnell, R-Ky, as Minority Leader.

FY2011 Budget At Top Of Congress To Do List 

Fiscal year 2011 began October 1st, but House Democrats and Republicans have failed to come to a permanent agreement on a budget. Currently, the government is being funded under a temporary extension. This "continuing resolution" will expire December 3rd. At stake are a number of bugetary cuts, seen as a necessary first step in reducing the federal deficit.

With a compromise between the two parties looking less likely, lawmakers will either have to approve another  continuing resolution or risk a federal government shut down akin to that of President Bill Clinton's term. Republicans are pushing for a continuing resolution until next year when they will have more control in the House.

Senate Introduces Bill Dissolving 1099 Law

Senate Finance Committee Chairman Max Baucus (D-Mont.) announced last week that he would introduce legislation to repeal requirements for businesses to file forms that would report payments made for goods and services over $600 to the IRS. This provision became law under health care reform.

Self-employed business owners already issue a Form 1099 to independent contractors for amounts over $600; the new law would, in 2012, force all businesses to issue a Form 1099 for every good or service over $600, including independent contractor work.

Unlike larger businesses that may have accounting departments, the self-employed business owner has to fill the hat of bookkeeper, sales manager, customer service representative and more. The NASE has voiced strong opposition to this health care law and has been supportive of legislation that would not be such a regulatory and paperwork headache for the nation's entrepreneurs.

"Small businesses are the backbone of our economy in my home state of Montana and across the country, and they need to focus their efforts on creating good-paying jobs – not filing paperwork," Chairman Baucus said in a press release on the bill.

Expiring Income And Estate Tax Cuts

With the expiration of the Bush 2001 and 2003 tax cuts arriving at the end of the year, House lawmakers are at odds with each other regarding how to extend these tax cuts and who should receive the tax benefit. Republicans had previously rallied to extend the tax cuts for all individuals, whereas Democrats in both chambers have sought to permanently extend tax cuts for the lower and middle class (those making below $250,000). Some moderate Democrats are siding with a number of Republicans looking for a one-year extension to all.

President Obama recently acknowledged the gridlock in Congress and said he hopes to discuss the issue with leaders of both parties this week.

The NASE supports addressing the income and estate tax cuts. The association would prefer that these measures be extended so the self-employed do not face tax hikes next year and think it ideal to address them in a permanent fashion so the future of these tax cuts does not continue to remain uncertain.

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