Tech Law Journal Daily E-Mail Alert
January 8, 2003, 10:00 AM ET, Alert No. 578.
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Bush Proposes Changes to Tax Laws
1/7. President Bush made several proposals, particularly with respect to taxation, that are intended to increase the level of economic activity. He proposed ending the taxation of dividend income; he proposed accelerating the effective dates of several tax reductions that were included in legislation passed in 2001; he proposed raising the amount of equipment purchases that small businesses can expense; and, he proposed extending unemployment benefits and creating new re-employment accounts for displaced workers.

Phil Bond, who is Under Secretary of Commerce for Technology, and hence, a member of the Bush administration, stated that "The technology community will continue to play a leading role in our economic recovery and today's stimulus package will give them the tools they need to increase investment and create new jobs." He continued that "This Administration is committed to maintaining American leadership in a knowledge-based economy. Today's growth package is designed to create a pro-technology, pro-growth economy both in the near-term and the long-term". See, release.

Dividend Income. Bush gave a speech in Chicago, Illinois, in which he discussed his proposals. He addressed dividend taxation at length. He emphasized the equitable treatment of dividend income, rather that the effect that his proposal might have on investment and economic performance.

He stated that "We are increasingly a nation of owners, who invest for retirement and the other financial challenges of life. One-half of American households own stock, either directly or through pension funds. And we have an obligation to make sure -- now more than ever -- that American investors are treated fairly. We can begin by treating investors fairly and equally in our tax laws. As it is now, many investments are taxed not once, but twice. First, the IRS taxes a company on its profit. Then it taxes the investors who receive the profits as dividends." He added that "Double taxation is wrong. Double taxation falls especially hard on retired people."

Bush also argued that "Double taxation is bad for our economy. ... The benefits of this tax relief will be felt throughout the economy. Abolishing double taxation of dividends will leave nearly 35 million Americans with more of their own money to spend and invest, which will promote savings and return as much as $20 billion this year to the private economy. By ending this investment penalty we will strengthen investor confidence. See, by ending double taxation of dividends, we will increase the return on investing, which will draw more money into the markets to provide capital to build factories, to buy equipment, hire more people."

Small Business Expenses. Bush stated that "Currently, tax law permits small firms to write off as expenses up to $25,000 worth of equipment -- like computers or machinery that they need. I'm asking the Congress to raise that limit to $75,000, and index that number for inflation. This change, together with the faster rate reductions, will benefit more than 23 million small business owners. My view is this economy can thrive only if our small businesses thrive. And we will provide them every incentive to grow and create more jobs."

Acceleration of 2001 Tax Cuts. President Bush also stated in his Chicago speech that "I'm asking Congress to speed up three other tax reductions promised in 2001 -- tax reductions that will help our middle-income families. Instead of slowly reducing the marriage penalty until 2009, we should do it now, to help 35 million married couples. Instead of waiting until 2008 to move more taxpayers from the 15 percent bracket to the lowest bracket of 10 percent, we should make that change now and help 2 million working Americans. And instead of gradually raising the child tax credit from $600 to $1,000 per child by the year of 2010, for the benefit of 26 million families, we should raise it now."

See also, White House press office summary of proposal.

Sen. Paul Sarbanes (D-MD), the ranking Democrat on the Senate Banking Committee, stated that "A stimulus should be focused on the short run and it ought not to center on long run problems ... The Bush proposal is just the reverse of that. There is not much in the short run, there is a large amount in the long run, which is creating all kinds of problems for us down the road when we ought to be addressing the growing deficit problem, the future demands on Social Security, on Medicare, on education, and on all these pressing needs we have as a country."

Sen. Sarbanes added, "Who would argue that the Bush Administration's proposal is prudent and wise when we are confronted with a war on terrorism abroad, with a homeland security issue, and with a growing likelihood of a military operation with Iraq to commit away your resources the way the Bush plan does." He concluded that "This plan is lacking in prudence and demonstrates the reckless fiscal course the Administration is pursuing".

U.S. Telecom Association (USTA) President Walter McCormick released a statement in which he praised the proposal. He said “We applaud President Bush for his bold economic stimulus plan and his strong efforts to revitalize the nation's economy. In particular, the President’s call for elimination of redundant double-taxation of dividends, accelerated depreciation for investments and the permanent repeal of the death tax are critical to increasing consumer confidence and job creation."

McCormick also used the occasion to urge regulatory relief for the incumbent local exchange carriers. He said that "The telecommunications industry has experienced today's economic challenges first-hand and we welcome President Bush’s stimulus plan. However, as a principal engine of the U.S. economy, the telecom industry continues to be hobbled by outdated regulations that stifle capital investment. We stand ready to work with the Administration and the new Congress to implement growth-oriented policies that remove roadblocks to needed national investment and encourage renewed expansion of the U.S. economy and telecom sector."

Bush Nominates Judges
1/7. President Bush nominated numerous persons to be federal judges, including many persons whom he had also nominated in 2001. See, White House release.

In the previous Congress, the Democrats held a majority in the Senate, and on the Senate Judiciary Committee, which reviews judicial nominees. Sen. Patrick Leahy (D-VT), the Chairman of the Committee in the 107th Congress, held up many key nominees, especially those picked for the Courts of Appeals, by taking no, or little, action on their nominations. The Republicans regained control of the Senate in the November 2002 elections. Sen. Orrin Hatch (R-UT) will return as Chairman of the Committee.

Consequently, President Bush has renominated many persons who had been held up or rejected by the Senate Judiciary Committee in the last Congress. It was a regular component of President Bush's campaign speeches leading up to the November elections to ask voters to elect a Republican Senator so that he could get his judicial nominees confirmed by the Senate.

He most frequently focused on the nomination of Judge Priscilla Owen, who was rejected by the Committee on a party line vote. Bush renominated her to be a judge of the U.S. Court of Appeals (5thCir). Bush also renominated Judge Charles Pickering for a seat on the Fifth Circuit. He too was rejected on a party line vote by the Senate Judiciary Committee.

Bush also renominated Miguel Estrada (DC Circuit), who received only a hearing in the last Congress. He also renominated John Roberts (DC Circuit) who did not even receive a hearing last time around. Other key renominations include Jay Bybee (9th Circuit) and Carolyn Kuhl (9th Circuit).

The President also nominated Deborah Cook (Sixth Circuit), Richard Griffin (Sixth Circuit), David McKeague (Sixth Circuit), Susan Neilson (Sixth Circuit), Henry Saad (Sixth Circuit), and Jeffrey Sutton (Sixth Circuit). Bush also nominated Terrence Boyle (Fourth Circuit) and Timothy Tymkovich (Tenth Circuit).

Bush also nominated numerous persons to be U.S. District Court Judges: John Adams (ND Ohio), Daniel Breen (WD Tennessee), Cormac Carney (CD California), James Dever (ED North Carolina), Ralph Erickson (North Dakota), Sandra Feuerstein (ED New York), Gregory Frost (SD Ohio), Maurice Hicks (WD Louisiana), Richard Holwell (SD New York), Robert Junell (WD Texas), Thomas Ludington (ED Michigan), James Otero (CD California), William Quarles (Maryland), Frederick Rohlfing (Hawaii), Thomas Varlan (ED Tennessee), and William Steele (SD Alabama),

President Bush also nominated Timothy Stanceu to be a Judge of the U.S. Court of International Trade. He also  made several nominations for 15 year terms on the Court of Federal Claims: Susan Braden, Marian Horn, Charles Lettow, Mary Ellen Coster, and Victor Wolski. See, White House release.

Many of President Bush's nominees, particularly Court of Appeals nominees, will be opposed by liberal groups such as the National Abortion Rights Action League (NARAL). NARAL's Kate Michelman said in a release after the November 7 elections that President Bush "is moving aggressively to pack the courts with conservative ideologues in order to appeal to the far right wing of his party. With the White House and Congress now both in anti-choice hands, the President's move to stack the courts represents an attempt to fundamentally realign our entire federal government. The consequences, if left unchallenged, will be profound and real for generations to come."

During the 107th Congress very few technology related issues were addressed in Senate Judiciary Committee hearings on judicial nominations. Moreover, few of the nominees have backgrounds representing technology interests, or in fields of law that are important to the technology sector.

Bush Names Three to New Department of Homeland Security
Tom Ridge1/7. President Bush nominated Thomas Ridge (at right) to be Secretary of Homeland Security. See, White House release. Ridge has been Bush's homeland security advisor since October of 2001. He was Governor of Pennsylvania from 1995 through 2001. Before that he was a seven term Congressman from Erie, Pennsylvania. Before that he was prosecutor. He is also a decorated Viet Nam combat veteran.

On November 25, 2002, President Bush signed HR 3005 (Public Law No: 107-296), the bill creating the new Department of Homeland Security.

President Bush announced his intention to appoint Steven Cooper to be the Chief Information Officer at the Department of Homeland Security. He is currently Special Assistant to the President and Senior Director for Information Integration in the Office of Homeland Security. He previously worked at Corning. Before that, he worked for Eli Lilly. See, White House release.

Gordan EnglandFinally, President Bush nominated Gordon England (at right) to be Deputy Secretary of Homeland Security. See, White House release. England is currently Secretary of the Navy. England was previously EVP of General Dynamics, where he was responsible for information systems. Before that, he was EVP of the Combat Systems Group at General Dynamics. His undergraduate degree is in electrical engineering.

More News
1/3. The Federal Communications Commission (FCC) once again extended the deadline to submit reply comments to its Notice of Proposed Rulemaking (NPRM) [15 pages in PDF] in its proceeding titled "In the Matter of Digital Broadcast Copy Protection". This NPRM proposes that the FCC promulgate a broadcast flag rule, and seeks comment on this, and related questions. This is MB Docket No. 02-230. See, FCC release [PDF] and Order [PDF] of October 11, 2002 extending deadlines. See also, Order [PDF] of January 3, 2003 further extending the reply deadline.

12/20. The U.S. Court of Appeals (2ndCir) issued its opinion in Jasper v. Bovina Music, a case involving federal court jurisdiction in cases involving disputes over music copyright interests.

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Wednesday, January 8
10:00 AM. The House Commerce Committee will hold a hearing on the national "Do Not Call" telemarketing list. Timothy Muris, Chairman of the Federal Trade Commission, will testify. See, notice. The event will be webcast. Media contact: Ken Johnson or Jon Tripp at 202 225-5735. Location: Room 2123, Rayburn Building.

2:30 - 4:30 PM. The Federal Communications Commission's (FCC) WRC-03 Advisory Committee will meet. For more information, contact Alexander Roytblat at 202 418-7501. See, notice in the Federal Register. Location: FCC, Commission Meeting Room, 445 12th Street, SW.

3:00 - 5:00 PM. The National Infrastructure Advisory Council (NIAC) will meet telephonically to continue its deliberations on comments to be delivered to President Bush concerning the draft
National Strategy to Secure Cyberspace. The speakers will include John Tritak, Richard Clarke, Richard Davidson, and John Chambers. Persons interested in attending by telephone should call (toll free) 1-899-7785 or (toll) 1-913-312-4169 and, when prompted, enter pass code 1468517. See, notice in the Federal Register, December 24, 2002, Vol. 67, No. 247, at page 78415.

EXTENDED TO JAN. 31. Extended deadline to submit reply comments to the FCC in response to its requests for comments regarding whether to revise, clarify or adopt any additional rules in order to more effectively carry out Congress's directives in the Telephone Consumer Protection Act of 1991 (TCPA). This is CG Docket No. 02-278. See, original notice in the Federal Register, and notice of extension [PDF].

Thursday, January 9
POSTPONED TO JANUARY 27. Deadline to submit comments to the Federal Communications Commission's (FCC) regarding the Report [73 pages in PDF] of the FCC Spectrum Policy Task Force (SPTF). The report recommends that "spectrum policy must evolve towards more flexible and market oriented regulatory models." See, notice [PDF]. See, notice of extension [PDF].
Friday, January 10
12:15 PM. The Federal Communications Bar Association's (FCBA) Wireless Telecommunications Committee will host a luncheon. The topic will be "What's Up for the Coming Year in the Auctions & Industry Analysis, Public Safety & Private Wireless, Commercial Wireless & Policy Divisions". The speakers will be Division Chiefs at the FCC's Wireless Telecommunications Bureau Division. The price to attend is $15. RSVP to Wendy Parish at wendy@fcba.org. Location: Sidley Austin, 1501 K St., NW, Confr. Rm. 6E.
Monday, January 13
The Supreme Court will return from the recess that it began on December 16.

11:00 AM - 1:00 PM. The Heritage Foundation will host a panel discussion titled "Harnessing Information Technology to Improve Homeland Security". The speakers include James Gilmore (Chairman, Advisory Panel to Assess Domestic Response Capabilities for Terrorism Involving Weapons of Mass Destruction), Lee Holcomb (Office of Homeland Security), Tom Richey (Director of Homeland Security, Microsoft), Tom Gann (VP & GM, Siebel Systems), and Peter Brookes (Heritage). See, notice. Location: Heritage, 214 Massachusetts Ave NE.

Tuesday, January 14
9:30 AM. The Senate Commerce Committee will hold a hearing titled the "State of the Competition in the Telecom Industry". Media contact: Andy Davis (Hollings) at 202 224-6654. Location: Room 253, Russell Building.

The U.S. Court of Appeals (DCCir) will hear oral argument in Peninsula Communications v. FCC, No. 01-1273. Petitioner is a radio broadcaster operating on the Kenai Peninsula in south central Alaska. Judges Henderson, Randolph and Garland will preside. Location: 333 Constitution Ave., NW.

Deadline to submit comments to the USPTO to assist it in writing a report to the Congress regarding technological protection systems for digitized copyrighted works and to prevent infringement. This report is required by the Technology, Education and Copyright Harmonization Act of 2002 (TEACH). See, notice in the Federal Register, December 9, 2002, Vol. 67, No. 236, at Pages 72920 - 72921. For more information, contact Michael Shapiro at 703 305-9300 or teach.act@uspto.gov.

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