John Spratt: “These two tax provisions, called PEP and Pease, phase-out of the personal exemption and the phase-in limitation on…”

“These two tax provisions, called PEP and Pease, phase-out of the personal exemption and the phase-in limitation on itemized deductions, these two provisions were signed into law by the first President Bush. When the second President Bush sent up his request for tax cuts, these provisions were not included in his package of proposed tax cuts. They were added by Members and pushed to the very end of the implementation period. They do not actually get cut out or cut back, phased out until the year 2007. Nevertheless, as you are pointing out, these provisions, if they were simply left in place, would yield enough revenues over time to pay the cost of Katrina and leave a substantial amount of change on the table.”