For the third time in four years the House of Representatives passed a bill last week to permanently repeal the estate tax. The irresponsible and dangerous bill (H.R. 8) will cost $290 billion over the next 10 years but hidden within it are astronomically higher costs after the first decade. The House passed H.R. 8, sponsored by Rep. Kenny Hulshof (R-MO), by a vote of 272-162, with 42 Democrats and all but one Republican supporting the bill. The tally showed little change from the last House vote on estate tax repeal. In 2003, a bill passed 264-163, with 41 Democrats supporting it. The Joint Committee on Taxation has estimated H.R. 8 will cost $290 billion over the next 10 years. But this estimate really only measures four additional years of full repeal because the bill does not change estate tax law until after 2010. For the first 10 years of full repeal, from fiscal years 2012-2021, the cost of H.R. 8 will be $745 billion without including the increased debt burden. The House also voted on an alternative proposal sponsored by Rep. Earl Pomeroy (D-ND), which failed 194-238. Instead of fully repealing the estate tax, Pomeroy's bill would have raised the exemption level to $3 million ($6 million for couples) in January 2006 and set it permanently at $3.5 million ($7 million for couples) after 2009. This means the first $7 million of a family's estate would not be taxed under the estate tax. Pomeroy's alternative would also hold the tax rate at its current level of 47 percent and exempt 99.7 percent of Americans from paying the tax. At just a fourth of the cost of H.R. 8 over the next decade, the Pomeroy substitute was the fiscally responsible choice to further exempt small businesses and family farms from the estate tax and simplify the estate planning process by adding consistency to the tax code. Based on data from the Brookings Institution/Urban Institute Tax Policy Center, only 30 family farms or small business in the entire country would be subject to estate taxes under the Pomeroy alternative -- and, since these estates would be valued at over $7 million, they would not be such small operations. Pomeroy's proposal had two additional benefits. His substitute would have had a consistent long-term cost rather than hiding massive costs in the second decade and beyond, and it would have fixed a known problem with capital gains issues associated with H.R. 8. Under current law, when an individual inherits property, the tax basis of the property is "stepped up" to its value at death. H.R. 8 would repeal that provision beginning in 2010 and substitute carryover basis rules that preserve the tax on increases in value before death. The carryover basis rule is well known to be incredibly complicated and next to impossible to administer. It would require people to maintain records of assets for very long periods of times -- perhaps through multiple generations -- to determine the original price paid for the asset when wealth is inherited. A similar carryover basis provision was enacted in tax law in the 1970s, but proved to be so unworkable that it was repealed before it ever took effect. Ironically, the House debate over estate tax repeal coincides with debate in Congress over cuts in programs assisting low-income families with children, the elderly, and people with disabilities. The House-passed budget resolution calls for an estimated $30 billion to $35 billion in cuts over the next five years in the low-income health care program Medicaid, food stamps, and other programs for low-income families. It is possible these cuts could come from programs such as the Supplemental Security Income program for poor and disabled Americans, foster care and adoption assistance programs, the Temporary Assistance for Needy Families program, and child care assistance supports. The budget resolution may also call for cuts to the Earned Income Tax Credit (EITC) for low- and moderate-income working families. Many members of Congress have already expressed reservations about trimming back the EITC program while at the same time making permanent reductions to capital gains and dividend taxes that mostly benefit upper-income Americans. Add to that the repeal of the estate tax and a pattern emerges in House proceedings of paying for tax giveaways to the rich with cuts in programs for everyone else that may make many Republicans more than a little uncomfortable. The estate tax debate will once again be determined in the Senate, where a House passed repeal bill died in 2003. It is still unlikely repeal supporters would have the 60 votes necessary to break a Democratic filibuster, but recent reports have indicated Senate Democrats may be moving towards a compromise. The Hill newspaper reported on April 6 that Minority Leader Harry Reid (D-NV) has appointed Sen. Charles Schumer (D-NY) to be the lead negotiator with Senate Republicans in seeking a compromise on the estate tax. There are also indications informal conversations have taken place between other Democratic senators, such as Sen. Ron Wyden (D-OR), and Sen. John Kyl (R-AZ), a leading proponent of repeal among Republicans. It is uncertain which direction those conversations and any more formal negotiations will go, but it is certainly possible that a bad reform proposal could emerge and gain broad bipartisan support.