Finance

The White House has issued its budget for the coming year, and as usual it is already drawing complaints.

GAO Comptroller General David Walker, who has spent the last three years on a "Fiscal Wake-Up Tour," again reiterated his agency's warning that the country is on an "imprudent and unsustainable fiscal path," while stressing the need for bi-partisan cooperation and the courage to make tough choices for the longer term. Walker, who has traveled to some 25 states on his tour, said simulations by the GAO and the Congressional Budget Office show that despite a three-year decline in the budget deficit, the U.S. faces "large and growing structural deficits driven primarily by rising health care costs and known demographic trends." The auditor general pointed out that the first wave of Baby Boomers has already filed for early Social Security retirement benefits -- and will be eligible for Medicare in just three years. Walker said rapidly rising health care costs are not simply a federal budget problem, but rather the No. 1 challenge to the U.S. and that the problem calls "for us as a nation to fundamentally rethink how we define, deliver, and finance health care in both the public and the private sectors." Walker said "While Congress and the administration are focused on the need for a short-term fiscal stimulus, our long-term challenge increases the importance of careful design of any stimulus package. It should be timely, targeted and temporary, while at the same time creating a capable and credible commission to make recommendations to the next Congress and the next president for action on our longer-range and looming fiscal imbalance."

Congress can't seem to agree on what to do about an economic stimulus package, which could mire the effort to produce an effective package in time to do some good.

A prominent Senate Democrat said that he would add rebates for senior citizens who depend on Social Security to the economic stimulus package, along with an extension of unemployment benefits.

The House voted by a 385 to 35 margin to pass the economic stimulus package agreed to by President Bush and House leaders.

Congressional leaders have struck a $150 billion deal on an economic stimulus plan that would give most taxpayers rebate checks of $600 to $1,200.

President Bush encouraged Congress to pass the economic stimulus package he agreed to with House leaders without adding extra provisions.

Michael Oxley, the former chairman of the House Financial Services Committee who co-sponsored the Sarbanes-Oxley Act of 2002, has joined the International Advisory Council of APCO Worldwide, a consultancy that specializes in corporate communications.

The Senate Finance Committee held hearings to discuss an economic stimulus package and hear testimony from the Congressional Budget Office about the available options.

The stimulus package that President Bush and Congress are hammering out could be enough to jumpstart the economy, but don't count on it.

President Bush called for an economic stimulus plan that includes tax breaks for individuals and businesses.

Presidential hopeful Sen. John McCain, R-Ariz., proposed cutting the corporate tax rate to 25 percent from 35 percent, matching Rudolph Giuliani's plan.

A watchdog group, Americans United for Church and State, has asked the Internal Revenue Service to investigate a Nevada church whose pastor called for the election of Democratic presidential hopeful Sen. Barack Obama, D-Ill.

The Congressional Budget Office has released a report on various options for stimulating the economy, including cutting personal and corporate taxes.

President Bush is considering a variety of options for an economic stimulus package to perk up the economy, reportedly including a possible tax rebate of $500 for individuals, along with business tax breaks to encourage equipment investments.

The Internal Revenue Service said the upcoming tax-filing season would start on time in mid-January, except for up to 13.5 million taxpayers who will have to wait until Feb. 11 if they need to file any of five forms affected by the late enactment of a patch for the alternative minimum tax.

Sen. John McCain, R-Ariz., has announced his tax plan, saying he would permanently repeal the alternative minimum tax and make the Bush tax cuts permanent.

President Bush signed into law a one-year patch for the alternative minimum tax, in addition to a $555-billion omnibus spending bill to fund government operations through 2008.

The House has again passed the Mortgage Forgiveness Debt Relief Act, an effort to help people whose homes have been foreclosed by canceling taxes on any mortgage debt they have been forgiven.

The House approved an amended version of a bill that delivers tax relief to members of the armed services, in addition to emergency volunteers.