Consumer Spending Slows in November - 12/ 24/2004 AP Washington Post
Growth Was Modest Compared With October's Rise - New Home Sales Cool. US consumers boosted spending only slightly in November, compared with a brisk rise in October, according to a Commerce Department report. November new home sales cooled while demand for big-ticket manufactured goods rebounded. The latest batch of economic reports released yesterday, though sending slightly mixed signals, still painted a picture of a modestly growing economy, analysts said. Analysts said they still expect respectable growth in the fourth quarter, with estimates ranging from a 3.5 percent pace to topping a 4 percent pace.

Housing Starts Took Plunge in November - 12/16/2004 Washington Post
The umber of housing units on which builders worked plunged 13.1 percent in November from the previous month, the biggest monthly drop in nearly eleven years, according to the Commerce Department.

Fed Raises Key Benchmark Rate - Washington Post 12/15/2004
Federal Reserve officials raised a key short-term interest rate yesterday for the fifth time this year, and indicated they will gradually move rates higher next year to keep inflation under control as the economy expands. The central bank policymakers decided unanimously to raise the federal funds rate, the interest rate charged between banks on overnight loans, to 2.25 percent from 2 percent yesterday. The economy "appears to be growing at a moderate pace . . . and labor market conditions continue to improve gradually," the statement said, adding that inflation and longer-term inflation expectations "remain well contained."

Rally Lifts S&P 500 to Three-Year High - Associated Press 12/14/04
Investors pushed stocks substantially higher as investors greeted the Oracle takeover of PeopleSoft and a climb in retail sales as a sign of continued economic improvement.

Wholesale Prices Rise in November - Associated Press 12/10/2004
Wholesale prices climbed by .5 percent in November -- an improvement compared with the previous months surge (increased by 1.7% -- the largest increase in 14 years), but fresh evidence that inflation is picking up as the econmy gains momentum.

THE ECONOMY: SEVEN INDICATORS - From CNN Money (as of 12/2/04)

The indicator	What it's telling us	Next update
Consumer Confidence	Weak Growth	December 28
Retail sales	Rebounding Growth	December 13
Leading Economic Indicators	Slowing Growth	December 20
Manufacturing Activity (ISM)	Rebounding Growth	January 3
Industrial Production	Moderate Growth	December 14
Jobs Growth	Rebounding Growth	December 3
Inflation (CPI)	Little Inflation Threat	December 15

European Interest Rates - 11/29/04 Govtexec.com
The European Central Bank is expected to signal this week that it is inclined toward raising interest rates, a move that could boost the already-strong euro against the sagging dollar," the Wall Street Journal reports. "The decision, a clarification of previous mixed messages at a time of global unease in currency markets, would show that Europe's monetary-policy makers are more concerned about the risk of inflation fueled by high oil prices than about moderating the euro or protecting the sluggish growth of the 12-nation euro-zone economy, the world's second-largest.

Congress May Try Again on Charitable Giving Bills, Aide Says - 11/5/04 by Fred Stokeld Tax Analysts, Inc.
Congress may take another shot at passing legislation to encourage greater charitable giving if the Bush administration expresses an interest, according to a Senate Finance Committee staffer.
The staffer said efforts to get charitable giving proposals approved probably would be redoubled if the administration seeks the legislation's passage. The legislation, which includes a charitable deduction for nonitemizers and an IRA rollover provision, has passed the House (H.R. 7) and the Senate (S. 476), but has been unable to make it to conference.

Car Donations
In a December 7 letter to Gregory F. Jenner, Treasury acting assistant secretary for tax policy, Donald C. Alexander, former IRS commissioner, discussed the new used car donation rules under section 884, specifically whether new procedures under subsection (f)(12) apply to used car donations in which the claimed value of the car exceeds $500. Alexander believes that the new rules apply if the claimed value on a used car donation exceeds $500, but he recognizes that Treasury will still have some concerns about tax avoidance. Therefore, he suggested that charities receiving a donated vehicle obtain a certificate from the donor saying that the donor would not claim a deduction for the car exceeding its fair market value.

The certificate's flat statement that in no event would the donor claim more than the fair market value of the used vehicle in its current condition should protect the revenues adequately. The amounts involved are small and the applicable tax rates are low. Most individual taxpayers don't itemize. Congress surely had these factors in mind when, balancing the need for revenue protection against the imposition of undue burdens upon donors and charities, it expressly limited the new requirements of subsection (f)(12) to cases where the "claimed value" of the contribution exceeds $500.
Internal Revenue Service 12/13/04

Tax Reform Will Wait Until 2006
Representative Roy Blunt (R-MO), the House Majority Whip, spoke on December 7, 2004 in Washington. He indicated that Congress would focus on Social Security reform first and then move on toward tax reform. A panel to make tax reform recommendations will be appointed in 2005. The panel will have three specific goals to guide their proposals. These goals are as follows: