The 108th Congress
The 108 Congress was sworn in on Jan. 7. The composition of each chamber follows: House of Representatives: 229 Republicans, 205 Democrats, 1 Independent Senate: 51 Republicans, 48 Democrats, 1 Independent As expected, Rep. Dennis Hastert (R-IL) was reelected as Speaker of the House. Rep. Tom Delay (R-TX) is the House Majority Leader. Rep. Nancy Pelosi (D-CA) is the House Minority Leader. In a surprising turn of events, Sen. Bill Frist (R-TN) became the new Senate Majority Leader. The man expected to take over as Majority Leader, Sen. Trent Lott (R-MI), stepped aside following a political backlash resulting from racially insensitive remarks he delivered at the retirement party for outgoing Sen. Strom Thurmond (R-SC). Sen. Tom Daschle (D-SD) is the Minority Leader. With respect to committee leadership, Rep Mike Oxley (R-OH) will remain Chairman of the House Financial Services Committee and Rep. Barney Frank (D-MA) will take over as Ranking Member. The chairman and ranking member of the Housing Subcommittee have not yet been selected. Following approval of a reorganization resolution (see below), the Senate Banking Committee leadership will consist of Chairman Richard Shelby (R-AL) and Ranking Member Paul Sarbanes (D-MD). Wayne Allard (R-CO) and Jack Reed (D-RI) will be the chair and ranking member, respectively, of the Housing Subcommittee.2003 Funding
The FY 2003 appropriations process remains problematic. Congress has approved yet another temporary continuing resolution (CR). The new CR is funded at 2002 levels once again and will run through January 31st. The current CR expires tomorrow. The House has approved “place-holder” legislation for the 11 remaining 2003 spending bills. Expectations are that once the Senate is reorganized and Republicans take control, the Senate will pass a large bill which includes the remaining 11 bills. To satisfy the White House’s demands for lower spending, these bills would be trimmed by about $9 billion from the original Senate bills. Presumably, the House would approve this omnibus bill and send it to the President. On January 8, National Journal’s Congress Daily reported that the new allocation for the Senate VA-HUD bill would total $90.35 billion. This figure represents a reduction of $1.1 billion less than the original Senate bill and a $640 million reduction from the House total.Senate Reorganization
Although Sen. Bill Frist (R-TN) is recognized as Senate Majority Leader and the GOP effectively controls the Senate floor agenda, Democrats are still holding the committee chairmanships. The Majority Leader is recognized by tradition. However, in order for Republicans to take control of the committees, the Senate must approve a reorganization resolution. Disputes between Republicans and Democrats over allocation of the funding for the committees are preventing an agreement on the reorganization resolution. So, for the time being, Republicans can control what comes before the full Senate for a vote, but Democrats can control the committee agenda.Flood Insurance
On December 31, FEMA’s authority to issue flood insurance expired. HR 11, approved by Congress this week, reauthorizes the current flood insurance program through December 31 2003, and makes coverage retroactive to Jan.1, 2003. The bill is on its way to the President.Tax Cuts
Debate is already beginning about the President’s new tax cut plan. Billed as a “jobs and growth plan,” it would cost about $670 billion over 10 years. There is no mention of housing in this plan. Highlights of the President’s proposal include:- Making all tax rate reductions from the 2001 tax law effective as of Jan. 1, 2003
- Reducing the “marriage penalty” in the tax code
- Raising the child tax credit from $600 to $1000 per child this year
- Increasing the number of filers in the lowest 10% tax bracket
- Ending “double taxation” of dividends
- Increasing from $25,000 to $75,000 and indexing for inflation expenses small businesses can write off for equipment purchases
- Extending unemployment benefits
- Creating a new $3.6 billion program for states to fund “Personal Re-employment Accounts” for the unemployed