Washington Weekly
Jan. 19, 2015

Last Week

In a week shortened by strategic planning retreats for the House and Senate GOP, the Senate managed to kick off a debate on Keystone XL and energy policy. The Senate cast just one vote last week, which was to begin amendment debate of the KXL bill. Needing 60 to advance, they achieved a vote of 63-32. The House took up a number of regulatory reform bills, which ASA supported. One bill, H.R. 185, would address federal agency rulemaking by requiring agencies, when making a rule, to base all preliminary and final factual determinations on evidence, to consider the legal authority under which the rule may be proposed, to address the specific nature and significance of the problem the agency may address with the rule. In addition, agencies would be required to publish advance notice of proposed rulemaking in the Federal Register for major rules and for high-impact rules (rules having an annual cost on the economy of $100 million or $1 billion or more. The House also passed (FY 2015) appropriations for the Department of Homeland Security; the bill provides $39.7 billion in discretionary funding for DHS, an increase of $400 million compared to the fiscal year 2014 enacted level.More

This Week

The Senate begins the challenging task of debating amendments to the energy bill. One of the key differences between the House and Senate is that germaneness rules rarely apply in the Senate, meaning that just about any item related to energy has a possibility of being debated. It is up to new Energy and Natural Resources Chairman Lisa Murkowski, R-Alaska, and her new counterpart Maria Cantwell, D-Wash., to effectively determine which amendments will and will not get floor time in the coming days. The House is scheduled to take up legislation that would coincide with the 42nd anniversary of Roe v. Wade on Thursday; the legislation would outlaw terminating a pregnancy after 20 weeks. In addition, the House is also set to approve a bill that would speed up approval of pipeline permitting.More

Item of Interest

The president is set to deliver his annual State of the Union address on Tuesday evening. In an attempt to kick off the conversation for the week, the White House has released its latest proposal for tax reform. It contains a proposal to switch from stepped-up basis to carryover basis for gifts and bequests. Additionally, the proposal calls for increasing the capital gains rate to 28 percent. One item that it does not address, although may still be under threat, is further rolls backs to the estate tax. As members of the Family Business Estate Tax Coalition, we are watching closely how this could impact multi-generation businesses. The FBETC has long championed a tax code that maintains stepped-up basis is one of the keys in the estate tax debate. Switching over to carryover basis would result in a very large capital gains tax increase, which we would oppose.

For example: If a piece of land bought in 1982 for $200,000, it would have a basis of $200,000 at that time. If the landowner willed the property to her child and died in 2012, the value of the property at her death was $900,000. The stepped-up basis for the new owner would be $900,000. If the child then sold the land for $900,000, no capital gains taxes would be due because there was no increase in basis. (If the land were sold for $1 million, capital gains taxes would be due on $100,000, the amount of basis increase while owned by the child.) More

Gasoline Tax Increase Not Gaining Momentum
Roll Call
Transportation planners spend their lives analyzing it and trying to devise ways to relieve it. Especially with lots of transportation wonks in Washington this week for the 94th annual meeting of the Transportation Research Board, there was much expert discussion about congestion on the highways, in cities and at seaports.More

Biz Hears 2016 Undertones in Obama SOTU
The Hill
State of the Union or 2016 stump speech? That's what Washington's financial regulatory watchers are wondering as they review the tax policy plan President Barack Obama will formally unveil Tuesday during his State of the Union address. While Obama won't be on the ballot in 2016, his policy proposal comes at a time the Democratic Party is weighing how to handle a new GOP-controlled Congress and in which direction — left or center — to take the party heading into the new election cycle.More

Could Keystone Poison the Senate's Energy Plans?
Politico
Could the fight over Keystone be the end of the line for energy legislation this Congress? The Senate Energy and Natural Resources panel's new Chairwoman Lisa Murkowski is already laying out an ambitious agenda to try to open new areas for oil and gas exploration, buttress the power grid and implement new energy-efficiency policies. More

How will Obama Speak to a Hostile Congress?
National Journal
President Barack Obama has to make a choice in his State of the Union address. When he strides to the Speaker's Rostrum on Tuesday night and, for the first time in his presidency, faces a Congress under the complete control of his opponents, he must choose either defiance and denial or compromise and conciliation. And the country watching will know within minutes what tone he wants to set.More