Finance begins processing a whole host of tax issues

The Senate Finance Committee met on Thursday in what appeared to be the beginning stage of discussions on the fate of tax policy. 

"It was more exploratory to try and figure out what's the best policy for our country," said Senate Finance Chairman Max Baucus (D-Mont.) after the meeting concluded. 

Committee members from both parties met to discuss a broad ranges of tax issues, such as energy and reform, but talks seemed to focus on what to do about the tax cuts enacted by President George W. Bush that are slated to expire at the end of the year. 

How to handle the Bush tax cuts is a complicated question. The sluggish economic recovery has more than a few senators pressing to extend all of them, but doing so would cost more than $1 trillion and probably would add to the deficit.

"We're going to have to dig down and try to figure out a way to answer the big questions, namely what about the '01, '03 cuts in rates, what about the deficit, and AMT and so forth," Baucus said.

Members did not make a decision about marking up the Bush tax cuts before the August break.

"We raised that question," he said. "There's no strong feeling about any of those things." 

Committee member John Cornyn (R-Texas) said there was talk of marking up a bill in September. 

"My impression was they are talking September in terms of markup," he told reporters. 

Cornyn said that talks covered a number of tax matters, like the alternative minimum tax, energy, tax reform, and the Bush tax cuts. He also said there was some discussion about whether some of those issues could be combined. 

"The issue is whether to go small or go big and what can be done in the limited timeframe that we have," he said, adding. "We're dealing with the 2001, 2003 tax provisions, or are we talking about other things like energy or are we talking about a whole laundry list of tax [issues] like reform."