Legislative Outlook for 2001.

• Author: GAFFNEY-CAMPANELLA, SUSAN
• Position: United States congress

The first half of 2001 has seen increased legislative activity by a new administration and a closely divided House and Senate. With the Senate evenly divided, the Republicans enjoying a slim majority in the House (220-210-2-3 [as of 4/15/01]), and a Republican White House, the dynamics in Washington are interesting, to say the least.

This could be one of the most active legislative sessions Washington has seen in the past few years.

The next few weeks and months will bring greater attention to the details of the Bush budget, wrangling from the Senate regarding the exact size and structure of the tax cuts, discussions for creating a commission on the future of Social Security and Medicare, and a promise from Democrats to move forward with some of their initiatives.

Budget

The President delivered his FY 2002 budget as a blueprint in late February, and the detailed documents were released in mid-April. The budget resolution--a non-binding outline for the annual budgeting process--passed the House and Senate prior to the dissemination of the detailed budget. It sets forth the guidelines for the subcommittees writing appropriation bills in the House and Senate, allowing them to move ahead with appropriations bills. It also allows for the House Ways and Means and Senate Finance Committees to propose legislation for tax cuts or tax increases.

The resolution passed in the House calls for $1.6 trillion in tax cuts, while the Senate version calls for $1.18 billion. Both allow for an approximate 4 percent increase in discretionary spending.

Tax Issues

Remote Sales Tax Collection. Two bills have emerged in the Senate to address the expiring Internet tax moratorium (PL 105277). The moratorium, which bans states and localities from collecting sales tax on items purchased via the Internet, expires on October 1, 2001. Senator Byron Dorgan (D-ND) has introduced legislation (S 512) that extends the moratorium for four years--to December 31, 2005--and allows states to form a compact to develop a simplified sales and use tax system. After 20 states approve the compact, it will become law within 120 days unless Congress votes to reject the compact. States would then have the authority to collect sales tax on purchases made by a consumer regardless of the location of the seller.

Senator Ron Wyden (D-OR) has introduced legislation (S 288) that requires congressional approval before a simplified sales tax collection plan could take effect and calls for the...