The Washington Post is reporting that 40 states and the District of Columbia have banded together to build the technical infrastructure necessary to begin charging sales tax on internet transactions. From the article:

Working together under the auspices of the Streamlined Sales Tax Project, 40 states and the District of Columbia have issued two requests for bids from technology companies to design the software and Web-based networks to track millions of online purchases and process the appropriate sales tax payments.

A request issued by the states last Friday seeks bids to build a registration system where all Internet retailers -- ranging from giants like Amazon.com to smaller companies -- would go to declare their intent to collect and remit taxes on online sales made to customers in the project's participating states.

The second request, issued last November, is aimed at making it easier for online retailers to collect sales taxes. The states plan to award contracts to multiple vendors who would provide sales tax collection systems to online retailers. As currently envisioned by the states, Web merchants would pay nothing for the services. Instead, the vendors would take a small cut from the revenues.

The National Governor's Association estimates that in fiscal year 2003, at least $15.1 billion worth of state sales taxes were lost through internet transactions.

After coming close to negotiating a final bill before Congress adjourned in December, House and Senate committee leaders intend to reintroduce separate versions of the Water Resources Development Act (WRDA) next month. Congress usually adopts a WRDA bill every two years, but controversy over how the U.S. Army Corps of Engineers evaluates projects has stalled the legislation since 2001. House Committee leaders originally intended to move a bill directly to the House and Senate floor based on compromises reached late last year. Instead, the House Transportation and Infrastructure Committee and the Senate Environment and Public Works Committee will introduce separate bills, requiring the committees to reconsider the bills, possibly as early as February or March. Both committees also have jurisdiction over the highway bill, whose passage also eluded lawmakers last year and is generally considered a higher priority and could delay WRDA consideration.

The House leadership has delayed making Appropriations subcommittee assignments while it considers reorganization plans. House Majority Leader Tom Delay (R-Texas) has been pushing to restructure the committee and reduce from 13 to 10 the number of subcommittees. Committee insiders say that a range of options is on the table for discussion, but any change will meet with resistance from some committee members and interest groups concerned about programs being shifted from one subcommittee to another. Further complicating the reorganization is the reception any plan will receive in the Senate. The House and Senate subcommittees must be identical in order to more effectively conference final bills before they're sent to the President. Senate leaders do not share the same degree of enthusiasm or interest in a reorganization. Five subcommittees are considered to be exempt from restructuring plans: Agriculture, Commerce-Justice-State, Foreign Operations, Labor-HHS-Education, and Homeland Security. A final decision is expected in early February, about the time the President's budget request is sent to Congress, kicking-off the appropriations process.

Condoleezza Rice was confirmed as Secretary of State by the Senate today in a 85 to 13 vote. 12 Democrats and one Independent voted against her confirmation.

In other nomination news, Alberto Gonzales's nomination passed through the Judiciary Committee along a party line vote of 10-8. His nomination now moves to the Senate floor.

We've obtained a list of the various deadlines for appropriations issues in the House for Fiscal Year 2006. The chart follows, but we'll continue to update the dates and times as the information becomes aware to us, so be sure to check back often.

Deadline for various appropriations issues for FY 2006 in the House

January 26, 2005

The Congressional Budget Office has released revenue projections through 2010 for the Highway Trust Fund. Similar to assumptions made last year by the Bush Administration, CBO estimates that Trust Funds revenues will be $201 billion through fiscal year 2009 and $245 billion from fiscal year 2005 to 2010. These projections will have an impact on the size of the highway bill re-authorization, which is expected sometime this year. Last year Congress and the White House failed to reach a compromise on the cost of the authorization when the Bush Administration insisted on a bill no larger than $256 billion over the next six years. These new numbers indicate that unless Congress agrees on new sources of revenue for the trust fund, reauthorizing TEA21 will be constrained by the same funding levels as last year.

President Bush nominated former Deputy Treasury Secretary Michael P. Jackson to the number two spot at the Department of Homeland Security. Jackson had served in the Treasury Department from 2001-2003, later leaving to work for AECOM Technology Corp. He has been active in the government for a number of years, originally working for President George H.W. Bush first as Cabinet liaison at the White House and afterwards as chief of staff at the Transportation Department

Yesterday Carlos Guitierrez was approved by the Senate to head up the Commerce Department.

Guitierrez was the head of Kelloggs Corporation previously. He will be forced to tackle a record trade deficit of more than $600 billion as well as the continued loss of jobs overseas. Guitierrez replaces outgoing Secretary Don Evans.

HHS Secretary Tommy G. Thompson has announced the final regulations establishing the new Medicare prescription drug benefit. The prescription drug benefit and the other provisions included in the regulations are key elements of the Medicare Modernization Act passed by Congress and signed into law by President Bush on Dec. 8, 2003.

The new regulations will provide a prescription drug benefit available to everyone who is in Medicare, regardless of their income, how they get their health care now (whether through traditional fee-for-service Medicare or Medicare Advantage plan) or how they currently get their drug coverage.

The rules will say that every prescription drug plan must provide “adequate coverage of the types of drugs most commonly needed” by Medicare beneficiaries. These include drugs to treat high blood pressure, heart disease, cancer and Alzheimer’s disease. On the other hand, the rules say that a plan can establish a list of preferred drugs and can refuse to pay for other medicines. In general, the list, known as a formulary, must have at least two drugs for treating each condition or illness.

The rules also embody other important policy decisions that will determine exactly how the new program works and whether it succeeds. Consumers, insurers, drug companies and politicians have been sparring over almost every detail of the rules.

The final rules address many concerns that people expressed about a preliminary version, issued in late July. One concern centered on the fact that Medicare will replace Medicaid as the source of drug coverage for many of the elderly poor.

About 6.3 million low-income people are enrolled in both insurance programs. Medicaid, which is financed jointly by the federal government and the states, now pays for their drugs, but will not do so after Jan. 1, 2006. State officials and advocates for low-income people had expressed alarm that many of these beneficiaries would lose coverage for months, while they moved from Medicaid to a Medicare drug plan.

The law, the biggest expansion of Medicare since its creation in 1965, depends on private health plans to deliver the new benefit. Insurers, eager to control costs, wanted to limit the number of drugs they must cover. Doctors, drug companies and advocates for beneficiaries wanted to maximize the number.

The government offered a compromise. It allows the use of formularies and says insurers must cover only one drug in a therapeutic category or class if only two drugs are available and one is clearly superior.

Many employers have cut retiree health benefits in the last 15 years. The law offers subsidies to employers to encourage them to continue providing drug benefits to retirees.

The Congressional Budget Office (CBO) is slated to release tomorrow (January 25) its latest estimates on revenues and spending baselines for government programs. Included in their report will be a re-estimate of revenues expected in the Highway Trust Fund. Early reports leaking out of Capitol Hill indicate the CBO projections for income from the Federal motor fuels tax and other taxes supporting the trust fund will be lower over the next six years than they had projected last summer. While the new estimate may only be a few billion dollars below the old one, every few billion dollars means something at the margins -- particularly when the political climate for getting a bill done continues to be difficult.

We will keep our friends and clients posted on developments in the days ahead.

The Wall Street Journal is reporting that Federal Communications Commission Chairman Michael Powell will be resigning today.

Powell, the son of outgoing Secretary of State Colin Powell, has led the FCC during a controversial period, causing dissatisfaction from many groups encompassing various sides. During his tenure the FCC weighed in on indecency fines, communications company mergers and a heated battle between various telecom groups. His ideological bent has been hard to classify.

We've managed to obtain the call for projects for the re-authorization of TEA-21 that the House Transportation and Infrastructure Committee distributed recently. It's located over on the analysis side of the website, so be sure to head over there and check it out.

House Members will be required to submit their projects by February 7. We will be in touch to discuss projects you may wish to advance with your Representatives. In the meantime, do not hesitate to be in touch with any questions you may have.

Michael Leavitt, President Bush’s nominee to head the Department of Health and Human Services(HHS), told a Senate committee about his plan for an overhaul of the Medicaid program. Leavitt, a former Utah governor and current EPA administrator, said giving states more flexibility in how they use federal Medicaid money would allow them to cover more people while holding down federal costs. Leavitt told the Health, Education, Labor and Pensions Committee the program “is not meeting its potential to do well in the lives of the poor.” Health, Education, Labor and Pensions ranking member Sen. Edward Kennedy (D-Massachusetts) asked whether Medicaid could simultaneously hold down costs, increase enrollment and maintain quality care.

During the hearing, Leavitt was pressed on a range of issues, including recent findings that some FDA-approved drugs had serious side effects. Senators also urged Leavitt to advocate for a permanent leader for the FDA, which has been operating for the last year and a half without a permanent director. Leavitt said implementing the new Medicare drug law would top his agenda at HHS. However, Leavitt did not agree to some senators’ proposals to allow the head of HHS to negotiate with drug companies for better prices for Medicare beneficiaries. Leavitt said he thought that it was better to leave that for the markets.