On Oct. 17, House Ways and Means Committee Chair Charlie Rangel (D-NY) said that he will introduce the details of two separate pieces of tax legislation the week of Oct. 22: (1) a “stop-gap” bill that would contain a one-year AMT patch and a group of popular tax extenders; and (2) the “mother of all reform bills” that would contain provisions to permanently eliminate the AMT, cut the corporate tax rate, and raise taxes on upper income wage earners.

Rangel said he was moving the stop-gap bill in order “to make sure that we do not hold these things hostage while we wait for the big bill.” He said, “[t]he stop-gap bill has to come first and I will find the money to pay for it. It will be politically painful.” House and Senate taxwriters were expected to meet as early as Oct. 18 but no later than early next week to work out the details of the stop-gap bill,

The second bill, which is to be paid for by closing corporate loopholes, is expected to be revenue neutral. Rangel said that he had met with Speaker of the House Nancy Pelosi (D-CA) and members of his committee on the bill, and that a decision was made on vetting the bill, rather than fast-tracking it. He said that he planned to visit with businesspeople and consumer groups for discussions on his proposal. Rangel said he doesn't expect a vote on the reform bill until next year.

It is reported that Senate Finance Committee Chair Max Baucus (D-MT) has proposed waiving pay/go rules to pay for a one-year patch of the AMT, while providing offsets of $45 billion in expiring business tax provisions. Baucus has said that he wants to mark up the AMT/extenders bill next week. Apparently, Senate Budget Committee Chair Kent Conrad (D-ND) stormed out of a Finance Committee members meeting yesterday visibly upset, commenting that the tax plan outlined by Baucus was “unbelievably irresponsible.” A number of finance committee members have said that no consensus has been reached on the AMT. “We don't have an agreement at this point. Everybody agrees that it [AMT] has to be extended this year. The question is how to pay for it,” said Sen. Debbie Stabenow (D-MI).

Sen. Olympia Snowe (R-ME) said that some members are inclined to eliminate the AMT completely, while others want the AMT to be moved as part of a larger tax reform bill. There are also mixed responses on whether there should be offsets for the bill (which could lead to the bill being discharged from the Finance Committee without prejudice) with the details of the bill ironed-out on the Senate floor. Snowe said she would favor moving a “two year fix of the AMT, do the tax extenders, then talk about tax reform.”

Similarly, Sen. Gordon Smith (R-OR) said that members had not reached a decision on an AMT/extenders package, and that it was possible that the bill would be resolved on the Senate floor. He said there was some talk about using carried interest as a way to pay for the bill and that it would be difficult to get a one-year AMT patch without sweeteners like capital gains or dividends.

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