VOLUME No: 75 Issue No:1

Washington, D.C. - July 1, 2005

House Finishes Appropriations Work Before July 4 Recess;
Senate Continues to Play Catch-Up

As the House moves toward passage of its last fiscal 2006 appropriations bill, the Senate scrambles to pass its second and third. House Appropriations Committee Chairman Jerry Lewis (R-CA), has pushed through all 11 spending bills for the upcoming fiscal year, which begins October 1, 2005.

The House is currently considering $135 billion fiscal 2006 Transportation-Treasury-Housing spending bill (HR 3058). The Senate, meanwhile, on June 29 passed the first of its 12 appropriations bills for the coming year, a $26.3 billion measure (HR 2361) funding the Interior Department, EPA, and arts and cultural programs. The House passed its version of the legislation over a month ago.

The Senate still hope to pass at least two more spending bills before the Senate departs for the July 4th recess—the legislative branch measure (HR 2985) the energy and water development bill (HR 2419).

The homeland security appropriations bill (HR 2360) will have to wait until the Senate returns from recess, as it is expected to take up considerably more time to debate its complex and often controversial provisions.

Senate Republicans to Draft Social Security Bill;
House to Vote in July on Social Security Measure

Despite the absence of consensus about how to overhaul Social Security, Senate Finance Republicans will begin writing legislation on how to change the program.

It is anticipated the legislation will include individual accounts, but not the limited accounts created from Social Security's temporary surplus that the House Ways and Means Committee appears to support. The legislation would attempt to correct Social Security's fiscal imbalance by changing the index used to calculate benefits and raising the retirement age

Committee Republicans have continued to meet over the past several weeks in an attempt to reach an agreement regarding the proposal, but these meeting have not yet been successful.

House Republican leaders say they plan to hold a vote on a Social Security and retirement overhaul package as soon as July, despite opposition, concern from fellow Republicans and the lack of progress of companion legislation in the Senate.

The House bill will likely fall short of President Bush's vision for a Social Security overhaul that would address the program's long-term financial imbalance. The package would add benefits to Social Security and add to the nation's debt without reducing the program's long-term costs. The bill will center on the Republicans on the Ways and Means Committee proposal to create individual retirement accounts from Social Security's temporary surplus.

However, for a floor vote to occur before the August recess, the Ways and Means Committee would have to act quickly on legislation soon after returning from the weeklong July 4 th break.

Senate Committee Approves Stem Cell Bill to Expand Use of Umbilical Cords

On Wednesday, the Senate Health, Education, Labor and Pensions Committee approved a bill (S 1317) to expand the use of umbilical cord stem cells. This measure is expected to accompany more contentious embryonic stem cell legislation to be brought to the floor this summer.

The bill encourages the collection of stem cells from umbilical cord blood and establishes a database to help physicians and researchers access the cells and bone marrow to use in treatment and research. The committee also added an amendment that promotes recruitment and collection improvements in the bone marrow program.

Orrin G. Hatch (R-UT), the Senate bill's sponsor, said the final language had been worked out with House members and he expects the House to pass the legislation once the full Senate passes it.

Some senators were quick to say their support for the cord blood bill does not mean they will stop pushing for legislation to expand federal funding for embryonic stem cell research. Legislation (S 471, HR 810) has been introduced that would allow federal funding for research on stem cells extracted from surplus embryos at in vitro fertilization clinics.

Opponents of embryonic stem cell research liken the process to abortion because the embryo is destroyed in the process of extracting the cells. But few lawmakers disagree with the effort to collect and study more umbilical cord blood cells, which have been used in treating blood disorders.

In an effort to draw Republican support for embryonic stem cell research, Senator Hatch has indicated he is working on another version of embryonic stem cell legislation that would allow federal funds to be used for research on stem cell lines derived with private funds so that no taxpayer dollars would be used to destroy an embryo when extracting the stem cells.

Would Repealing the Estate Tax Help Retirement Security?

The House Ways and Means Committee chairman Bill Thomas (R-CA) is working on a Social Security package likely to include other popular provisions he views as vital to Americans' retirement savings —changes to pension law, permanent extension of the current reduced tax rates on capital gains and dividends, and even the permanent repeal of what opponents refer to as the “death tax.”

Under current law (PL 107-16), the estate tax will disappear in 2010, and then re-appear in 2011. In April, the House voted 272-162 in to make the temporary repeal permanent at a 10-year cost of $290 billion. The Senate seems unlikely to pass a permanent repeal, but negotiators are discussing ways to permanently reduce the tax.