Capitol Hill

As of press time, results of the presidential election are unknown. But what is known is that the 108th Congress did not finish important legislation before adjourning and will reconvene in what is known as a lame-duck session. Senate and House Republican leadership plan to call lawmakers to Washington, D.C., the week of Nov. 15 to organize for the 109th Congress, making that the most likely time for a lame-duck session to begin.

According to Roll Call magazine, the phrase "lame duck" is from the early days of London's stock market, Exchange Alley, and was used to describe bankrupt brokers who "waddle out of the alley." A 1910 edition of The Nation magazine in the United States described defeated officeholders as "lame ducks."

This year's lame-duck session will focus on a fiscal 2005 federal spending package. It also could take up bills involving such issues as intelligence agency reorganization and terrorism insurance.

Family tax bill

A piece of legislation Congress did not put off to a lame-duck session was HR 1308, Working Families Tax Relief Act of 2004; it was signed by President Bush on Oct. 4 to extend tax breaks for families set to expire as a result of the Economic Growth and Tax Relief Reconciliation Act of 2001. It extends the $1,000 per-child tax credit for five years—through 2009—and the broadened 10 percent income tax bracket through 2010. The standard deduction for married couples will be retained for four more years, and the bill also would renew—for one year—current income exemptions from the alternative minimum tax.

About $13 billion in business tax breaks were added to the bill just before it was sent to the president. The one- to two-year extensions of about 20 expiring or expired tax credits include the Work Opportunity Credit and Welfare-to-Work Credit.

Tax breaks

Congress had a more difficult time preparing corporate tax breaks in HR 4520, Jumpstart Our Business Strength (JOBS) Act, for final passage. Months ago, the House and Senate passed versions of the JOBS Act to repeal an export tax benefit known as FSC-ETI (foreign sales corporation-extraterritorial income) that violates international trade rules and replace it with more than $100 billion in new corporate tax cuts during the next 10 years. The JOBS Act is important to business interests that have been hit by punitive European tariffs, which rose to 11 percent Sept. 1 for more than 1,600 U.S. exports to Europe.

The Senate added tax breaks from the stalled energy bill HR 6, Energy Policy Act of 2003, to its bill, but they were dropped in a conference committee appointed by House and Senate leaders to reconcile differences between each chamber's respective corporate tax bill. Although conference committee negotiations were expected to carry over to a lame-duck session, conferees agreed on all provisions of the legislation the first week of October.

Congress passed HR 4520, now called American Jobs Creation Act, Oct. 11 and sent it to the president for his signature. NRCA's Washington office is analyzing the final version of HR 4520 to identify and more completely understand specific provisions that will benefit NRCA members.

Terrorism insurance

In September, the House Financial Services Committee took up legislation extending the federal backstop for insurance coverage against damages resulting from terrorism. HR 4634, Terrorism Insurance Backstop Extension Act of 2004, would extend the Terrorism Risk Insurance Act (TRIA) through 2007. NRCA belongs to the Coalition to Insure Against Terrorism that lobbied for enactment of TRIA in November 2002. The law is scheduled to expire at the end of 2005 and has helped make available terrorism insurance for large construction projects.

A recent study released by six insurance industry trade groups finds the U.S. economy could be negatively affected if TRIA expires. Without such an insurance backstop, the study estimates the gross domestic product could be $53 billion less and there could be 326,000 fewer jobs created. But despite movement in the House, there is only a modest possibility of corresponding Senate action during a lame-duck session.

Summary

Regardless of the outcome of the Nov. 2 election, Congress will have to return post-election for a lame-duck session. Such sessions can be unpredictable, but this one must work on spending bills for fiscal year 2005 because a continuing resolution passed by Congress Sept. 29 to fund federal departments and agencies lasts only through Nov. 20. The session also is expected to work on HR 10, 9/11 Recommendations Implementation Act, to reorganize federal intelligence agencies.

Craig S. Brightup is NRCA's vice president of government relations.