National Issues Conference & Happenings on the Hill.

The National Issues Conference in May was an unqualified success. Covering such issues as estate tax repeal, social security reform, pensions, IRS restructuring, licensing of tax preparers, independent contractors, and tax fairness, the 65 attendees rated the Conference very highly. When asked

Immediately following the NIC was the first-ever "Partnering Conference" between the IRS Taxpayer Advocate Service (TAS) and NSA members. Over 35 NSA members sat with nearly 50 Taxpayer Advocate employees for two days to discuss a variety of issues of mutual concern. The objective of the Conference was to allow the TAS to learn from practitioners their methods of handling taxpayer problems, and allow the TAS employees to explain their own procedures and constraints in resolving such problems.

The "Partnering Conference" was another tremendous success story, as the objective of the Conference was clearly met.

Although there were some tense moments as criticism was levied against one group or another, the tension was broken with frequent laughter and lighthearted commentary. The Conference went so well, there was an almost immediate decision at the highest levels to begin work on repeating such conferences around the country. Dr. Bill Stevenson, Chair of NSA's Federal Taxation Committee; Rick Oelerich, member of the Committee; and all other members of the Federal Taxation Committee worked diligently and skillfully to arrange and design this unique and groundbreaking Conference, and deserve kudos from all NSA members.

Legislative News

It is unlikely we will see any estate tax repeal legislation signed by the President this Congress. Treasury Secretary Summers described the GOP estate tax relief bill as an "extremely regressive" measure and said that the President made it clear he will veto legislation that would repeal the estate tax. However, Summers said there are "real concerns" about the estate tax treatment of small business, family farms and principal residences. The Democratic alternative would reduce the estate tax rate, while the GOP bill eliminates the tax over 10 years. Minority Leader Gephardt said that charging an estate with capital gains tax instead of the current tax rate is an idea that ought to be looked at.

The Senate Aging Committee held hearings on the effects of companies moving from traditional pension plan to cash balance conversion plans. While traditional plans rely on the length of time a person has worked for a company, cash balance plans allow for faster accrual and are considered more responsive to the mobile work force. But older workers at companies who have converted to cash balance plans are concerned that they will get smaller pensions under these plans than what they would otherwise be entitled.

Debt Reduction

The Ways and Means Committee may take up a measure to specify that additional budget surplus money expected to pile up this year would have to go to debt reduction.

Republicans have been anxious to match Clinton's challenge to exercise discipline and to use surplus funds to pay down the debt. While House Ways and Means Committee Chair Bill Archer has made it dear that he would like to see additional tax relief, he also wants to avoid leaving money unclaimed, fearing it would be used for additional spending.

Managed Care Bill Looking Bad

Currently in "conference," the Managed Care bill increasingly does not look likely this year. Because of Congress' schedule and the August national party conventions, political wrangling may hold the bill up as each party seeks political advantage from legislative gains. The issue at stake is how to balance patients' rights with health maintenance organization and employers' interests.

The conference has been meeting for four months to hash out a compromise between two different bills. Agreements on major issues, such as the scope of the bill and how managed care organizations will be held responsible for their decisions, is not too far off.

Senate Health, Education, Labor and Pensions ranking member Edward Kennedy (D-Mass.), who is on the conference, has been an outspoken critic of the lack of progress. He threatened in May to bring a bill to the floor if staff level negotiations went nowhere over the Memorial Day recess. One major difference between the measures is the House bill gives patients the right to sue their HMOs for denial of coverage. The Senate bill would cover significantly fewer people than its House counterpart and would not grant a new right to sue.