• It has been widely reported that there will be three amendments to H.R. 6049:

1. Energy Tax Extenders, fully offset by a Section 199 freeze, basis reporting, Federal Unemployment Tax Act (FUTA) surtax, foreign oil and gas extraction income (FOGEI), and foreign oil related income (FORI) and the Oil Spill Liability Trust Fund; 2. Alternative Minimum Tax (AMT) patch and other extenders or an AMT stand alone package, fully offset (offsets are unknown at this time); and 3. Personal/business extenders, AMT, and disaster relief, partially offset by deferred compensation, which raises taxes by $25 billion over ten years. This partial offset for the third amendment results in an overall net tax cut of $112 billion over five years and $106 billion over 10 years.

• Amendment #1 would provide tax cuts in the amount of $16.934 billion with offsets in the amount of $16.995 billion, resulting in net revenue of $61 million over ten years. Amendment #3 would provide tax cuts in the amount of $131.473 billion with an offset in the amount of $25.161 billion, resulting in a net tax cut of $112 billion over five years and $106.312 billion over ten years.

• H.R. 6049 passed the House by a vote of 263-160 on April 2, 2008.

• The bill authorizes an across-the-board pay increase for all uniformed service members of 3.9 percent, an increase over the President’s request of 3.5 percent. It rejects the President’s request for an increase in TRICARE fees, adding $1.2 billion to cover the shortfall.

• It adds authority for 7,000 more soldiers, 5,000 more Marines, and nearly 3,400 more Army National Guard and Army Reserve personnel.

• The bill shifts more of the costs of reconstruction onto Iraq and bans spending on major reconstruction projects.

• The bill imposes further restrictions on contractor personnel, including prohibitions on interrogations and the performance of “inherently governmental functions” in combat.

• The bill authorizes a significant reduction in missile defense programs, $411.8 million lower than the President’s request.

• It funds all of the requested aircraft and Navy ships.

• The House approved its version of the Defense Authorization bill, H.R. 5658, on May 22, 2008, by a vote of 384-23.

• The Congressional Budget Office (CBO) estimates that S. 3001 would authorize appropriations in the amount of $601.4 billion for FY 2009, including $70 billion for operations in Iraq and Afghanistan. CBO estimates that appropriation of the authorized amounts would result in additional outlays of $594 billion over the 2009-2013 period.

Background/Overview