11/06/2000
CEA - Legislative Process Halted - Lame Duck Congress Likely -
On Monday, October 30, Senator Phil Gramm (R-TX) told an assembled group of representatives of banking and OTC interests that negotiations with Senate Agriculture staff on the House passed legislation H.R. 4541, were bogged down, and that he intended to introduce comprehensive legislation when the 107th Congress convenes in January. Gramm pledged to push for passage of his legislation within the first 60 days of the next congress.
Many thought that the forces behind the passage of the CEA were so powerful that its passage was certain. However, NYMEX intercession with Senator Charles Schumer (D-NY) and key assistance from a joint effort by New York Congressional Delegation members Peter King (R-NY) and Carolyn Maloney (D-NY) was successful in slowing the "freight train."
In addition to Senator Gramm’s pledge to introduce legislation at the beginning of the new congress, the CFTC has scheduled a meeting for Monday, November 6 at which they will likely issue final rules on their regulatory proposal. While it is likely the Commission will continue to treat energy and metals contracts separately in their final rules, there will also likely be a process for seeking lighter regulatory treatment for individual contracts. One could certainly expect that those having electronic trading systems would seek additional exemption.
60/40 tax provision will be attacked in next congress - An unfortunate consequence of the efforts by the Chicago exchanges to push the CEA stock futures provisions was their agreement to give up 60/40 tax treatment on single stock futures. Treasure will use that concession to raise the entire issue of 60/40 treatment and will push to have it eliminated. This will be another major battle in the next congress.
In the next few weeks, we will be making a strong effort to replenish the NYMEX PAC–It will be critical to our efforts beginning in January.