President Calls for Bipartisan Health Care Summit

President Obama called for a bipartisan health care summit at the White House on February 25. The president, in an interview with CBS News Anchor Katie Couric on February 7, said that he wants to hold a large meeting with Republicans and Democrats "to go through systematically all the best ideas that are out there and move it forward."

"If we can go step by step through a series of these issues and arrive at some agreements, then, procedurally, there's no reason why we can't do it a lot faster than the process took last year," Obama said. When asked whether Congress should start from scratch with health care legislation, Obama indicated he wanted Republicans to put their ideas on the table, specifically on the issues of lowering costs, reforming the insurance market and covering 30 million uninsured.

The president maintained that, until measures are taken to reduce the health care cost curve, it will not be possible to reduce the long-term deficit or make headway on the economy. "The most important thing we can do to help the economy is get a health care reform bill passed." At the same time, he stressed that measures to create jobs is at the forefront of his 2010 agenda.

Prior to the summit, the president on February 9 will begin monthly meetings with House and Senate Republican leaders at the White House, a move that comes in the face of rising criticism that GOP members have been shut out of the health care process. The White House meeting will occur as Washington, D.C., braces for more snow only a few days after a severe storm paralyzed the nation's capital and forced a close-down of the federal government on February 7.

Congressional Reaction

House Republican Leader John Boehner, R-Ohio, expressed muted optimism about Obama's plan for bipartisan health reform negotiations. He said the best way forward would be to scrap the Democrats' efforts and start work on incremental reform, such as that embodied in GOP alternatives. House Speaker Nancy Pelosi, D-Calif., said the Democratic health care bills did contain some Republican amendments. She also expressed hope that GOP lawmakers would work in a bipartisan fashion.

Republican leaders welcomed the invitation but insisted that the president must start over on health care reform. Senate Minority Leader Mitch McConnell, R-Ky., said Republicans always appreciate the opportunity to share ideas with the president, adding that "if we are to reach a bipartisan consensus, the White House can start by shelving the current health spending bill." Senate Majority Leader Harry Reid, D-Nev., said in a statement that Senate Democrats would "join with the president in reaffirming a commitment to seeking a bipartisan solution to health reform."

By Paula Cruickshank, Jeff Carlson and Stephen K. Cooper, CCH News Staff

Pennsylvania --Multiple Taxes: Philadelphia Decouples From 2009 Federal Bonus Depreciation Law

For purposes of the Philadelphia business privilege (BPT) and net profits (NPT) taxes, taxpayers cannot claim the special bonus depreciation allowance enacted by the federal American Recovery and Reinvestment Act of 2009 (P.L. 111-5) for qualifying property placed in service during calendar year 2009. Therefore, taxpayers must include the amount of the 50% special allowance deduction for depreciation of qualified property claimed and allowed under IRC §168(k) in determining taxable net income subject to the BPT.

In Pennsylvania Act 89 of 2002, the state decoupled from IRC §168(k) and linked the BPT net income add-back adjustment to that made in arriving at taxable net income for the state corporate net income tax. Since Act 89 did not distinguish a different BPT decoupling treatment for unincorporated taxpayers, they will have to make the same adjustment even though they do not file a corporate net income return.

The required adjustment is made in two steps. First, any §168(k) bonus depreciation for the qualified property must be added back to net income. Then, an additional deduction for depreciation is allowed in the amount of 3/7 of the federal deduction allowed for depreciation of the qualified property (net of the bonus depreciation).

To achieve the full recovery of the entire bonus depreciation, Act 89 permits the continued deduction of any remaining unrecovered bonus depreciation until the total amount has been claimed. In cases where the asset is disposed of prior to full recovery of the disallowed bonus depreciation, the taxpayer may deduct the remaining bonus depreciation in the year of disposition.

 Net Profits Tax

Although Act 89 does not specifically address the bonus depreciation as it relates to the NPT, taxpayers who use the federal tax accounting method to report NPT will not be allowed to take the federal bonus depreciation either. Business privilege tax Regulation 403 requires consistency in the accounting method used for both taxes.

Policy Update --Decoupling From Federal Depreciation, Philadelphia Department of Revenue, February 2010