(Washington D.C.) A bill passed by the U.S. House of Representatives prevented a tax increase, expanded energy production, and strengthened the Medicare program. 

H.R. 6111 includes a number provisions extending current tax law, including an above-the-line deduction for higher education expenses and out-of-pocket teacher expenses. (Above the line deductions can be claimed without having to itemize deductions.) The research and development tax credit was also extended. But, a particular highlight for Texans is the ability to continue deducting state sales taxes from their federal income taxes.

Prior to the passage of a tax relief measure two years ago, state sales taxes which an individual paid during the year could not be used as a deduction on federal income tax returns. However, there had long been a deduction allowed for state income taxes. Essentially, Texans were being penalized on their federal taxes because Texas funds state government through sales taxes instead of a state income tax.

Congress eliminated the inequity through "The American Jobs Creation Act of 2004." But, the legislation passed then only allowed the state sales tax deduction for the 2004 and 2005 tax years. Thus, without the passage of H.R. 6111, the state sales tax deduction would not have been available to Texans when they file their tax forms next year. H.R. 6111 extends state sales deductibility through the 2007 tax year. 

"I am glad we have added another two years of life to the state sales tax deduction. But, my goal is to ultimately make this deduction permanent. States without a state income tax should be treated fairly," said Thornberry.

On the energy front, H.R. 6111 significantly expands the opportunity for offshore oil and gas production in the Gulf of Mexico. More than 8 million acres in the Gulf of Mexico that are currently off-limits will now be available for energy development. Geologists estimate that the newly opened territory contains at least 1.26 billion barrels of oil and 5.8 trillion cubic feet of natural gas. Experts say the crude oil in the newly opened region is sufficient to produce enough gasoline to fuel 2.7 million cars for 15 years and enough natural gas to heat and cool nearly 6 million homes for 15 years.  

"This bill allows us to produce more energy at home.  The House passed a bill earlier this year that would have opened up more offshore territory to energy production, but the political reality is that this bill is the most we could get through the Senate this year," said Thornberry. 

H.R. 6111 also includes significant Medicare provisions that will benefit Texans who depend on Medicare.  The bill prevents Medicare physician payment reductions which could have driven some doctors out of the Medicare program.

Passage of H.R. 6111 came in what is scheduled to be the final week for the 109^th Congress.  The House is scheduled to adjourn later tonight.

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