In what has thus far been a difficult 2006 for advancing tax legislation, Congress again recessed without completing action on the tax reconciliation legislation or the pension reform legislation held over from last year.
Tax reconciliation legislation (HR 4297), so labeled because it comes with $70 billion in budget protection, passed the Senate on November 17, 2005 and the House on December 8, 2005. The difficult issues in conference continue to focus on trying to squeeze both AMT relief and extension of capital gain and dividend tax cuts within the budget protection limits. It appears that extensions of other provisions that expired on December 31, 2005 may be pushed out of this legislation.
Similarly, pension reform legislation passed the Senate on November 16, 2005 and the House on December 15, 2005, but conferees have been working through a number of differences between the two pieces of legislation. Since many of the conferees are involved with both conferences, that has also hindered the time that has been available to devote to each. As time passed, the conferees started placing their emphasis on the pension legislation to try to get it passed before a mid-April funding deadline. Then, just before recess, there was a last minute push for tax reconciliation agreement. Both efforts fell short. Congressional leaders indicated that there was hope for quick action on both pieces of legislation when Congress returns the week of April 24, 2006.