House, Senate Approve Budget Resolutions for FY 2010

The House and Senate today are expected to approve their budget resolutions for fiscal year 2010. The budget resolution is a non-binding framework that guides tax and spending policy for the upcoming fiscal year. Consideration of the FY 2010 budget resolution has been highly partisan, with both the House and Senate Budget Committees having approved their respective resolutions on a party-line vote. In the House, the GOP offered a substitute amendment, and the Senate has debated a number of amendments during the course of the week. The GOP has argued that the resolution spends and taxes too much. AGC sent a letter to the Hill expressing concern with provisions in the resolution that would increase taxes on individuals and couples earning over $200,000 and $250,000, respectively, which could impact nearly two-thirds of construction firms that are organized as subchapter S corporations (S Corps) and pay their taxes on their shareholders' individual tax returns. AGC supported an amendment in the Senate that would have provided for additional permanent relief from the estate tax. The budget resolutions in both the House and Senate propose to freeze the 2009 estate tax levels. The amendment would raise the exemption to $5 million - up from $3.5 million - and reduce the tax rate to 35 percent from 45 percent. AGC also expressed concern with the Democratic leadership's threat to include special instructions in the budget resolution that would have allowed the House and Senate to speed up passage of controversial legislation, such as health care reform and climate change. While the House resolution includes these instructions for health care reform, neither resolution would do the same for climate change. The Senate approved an amendment by a vote of 67 to 31 that would prevent Senate leaders from using this tactic on climate change. AGC also wrote in appreciation of both chambers' rejection of the Obama Administration's proposal to eliminate the use of "contract authority" for the federal transportation programs. As a result of this action, the highway, transit and aviation programs will retain their unique budgetary treatment. In addition, AGC expressed its support for the levels of funding assumed for the federal highway and public transportation programs and for the "reserve funds," which allow these levels to be adjusted upward if additional federal revenues are generated to finance increased surface transportation investment.