Two California-born turkeys named Apple and Cider were at the White House this week to receive the official Presidential pardon. The turkeys were 21 weeks old and the names Apple and Cider were selected in a contest of California school children.
President Obama issued the pardon and noted, "It's like a turkey version of Dancing with the Stars. Except the stakes for the contestants were much higher. Only one pair wins the prize: life, and an all-expenses trip to Washington."
Following the pardon ceremony, Apple and Cider will live out their lives on the Mount Vernon Estate of President George Washington.
There was another turkey issue in Washington this week. The National Turkey Federation, an organization with members that include Perdue Farms and Butterball Turkey LLC, lobbied for the expiration of an ethanol tax break. The turkey raisers are hoping that Congress will reduce the Volumetric Ethanol Excise Tax Credit (VEETC).
House Ways and Means Chair Sander M. Levin (D-MI) introduced an energy tax bill earlier this year that would reduce the excise credit from 45 cents per gallon to 36 cents per gallon. If Congress takes no action, the credit could lapse.
The credit is very popular in the Midwestern states that raise corn. Lobbyists for those states continue to support the ethanol credit. However, because much of the feed for turkeys is developed from corn, the companies raising turkeys would prefer that the credit lapse or be reduced. A lapse or reduction of the ethanol credit will be likely to reduce the cost of corn.
CBO Director Urges Fiscal Restraint
Elmendorf stated, "To avoid a worsening of fiscal outlook, any policies that widen the budget deficits in the near term would need to be accompanied by specific policies to reduce spending or increase revenue over time."
The CBO Director noted that there is a basic disconnect between the amount of taxes that are being paid and the government services that are being rendered. He continued, "A permanent extension of the tax cuts combined with the budgetary pressures posed by the aging of the population and rising costs for healthcare would put federal debt on an unsustainable path."
Elmendorf continued to suggest that it is important for Congress to face the deficit issues and begin to enact specific laws to resolve the problem.
Editor's Note: The deficit and taxes will be foremost on the minds of everyone in Washington next week. On November 30th there will be a meeting between President Obama and leaders of both parties in Congress. They will need to discuss the potential for a compromise on extending the tax cuts. The President and Democratic leaders continue to advocate extension of middle-class tax cuts and an increase in tax rates for the top two brackets. Republican leaders from the House and Senate prefer a two-year extension of all of the existing tax rates.
Baucus Proposes Repeal of $600 Form 1099 Requirement
Previously, the requirement existed for corporations to file Form 1099 if they made payments for services more than that amount, but they were not required to file the form for all payments for goods. The reaction to the proposed rule has been overwhelmingly negative. Many mid-size and small businesses have stated that they will be required to file hundreds of Forms 1099. The accounting and administrative burden in their view, is much greater than the potential tax revenue to be gained.
Following a firestorm of criticism by advocates for a small business, Senate Finance Committee Chair Max Baucus (D-MT) attached an amendment to the FDA Food Safety Modernization Act of 2010. This amendment would repeal the $600 Form 1099 requirement for payments by corporations for goods.