The 108th congress: a task list.

• Author: Shepler, Bob
• Position: Washington Insights

This year's historic election outcome represents the first time in history that the sitting president's party gained seats in both chambers of the U.S. Congress during a mid-term election. President Bush is currently riding a wave of success--success politically, with the election wins; success legislatively, in the creation of the Department of Homeland Security; and success internationally, with the United Nations and Iraq--and it appears that he will have success with his legislative priorities in the 108th Congress.

When it convenes in January, the 108th Congress will begin to tackle a Bush agenda that contains several major tax priorities. While operating under tight fiscal constraints, because of the state of the economy and the almost certain military action against Iraq, Congress will likely consider the following legislative items:

* Make permanent the Economic Growth and Tax Relief Reconciliation Act of 2001. The $1.35 trillion tax cut that was signed into law in the summer of 2001--which, due to budget rules, will expire in 2011-contained gradual individual tax rate reductions, gradual increases in maximum contributions to qualified retirement accounts and a phase-out of the estate tax. The president has made it clear to Congressional leaders that he believes making those tax cuts permanent will add stability to the U.S. economy and reverse the current economic trends.

* Pension reform legislation. In the last Congress, there was great focus on some high-profile corporate insolvencies, where some employees lost much of their retirement assets due to heavy concentrations in company stock. Congress will again consider legislation aimed at protecting workers from large losses to their retirement accounts as a result of a corporate insolvency. In the last Congress, the House passed a version of such pension reform, but similar efforts stalled in the Senate.

* Corporate tax shelters. Congress will likely pass legislation similar to 107th Congress bill, S. 2498, that would impose new curbs on abusive tax avoidance transactions. The bill would allow the Secretary of the Treasury to impose new penalties under the Internal Revenue Code on companies that report transactions that the Secretary determines have the potential for tax avoidance or evasion.

* Corporate Inversion legislation. During the 107th Congress, Sen. Charles Grassley (R-Iowa.) introduced legislation that would penalize and discourage companies from moving corporate...