- The Washington Times - Wednesday, March 24, 2004

A bill to lower taxes on manufacturers and end a trade fight with the European Union stalled yesterday in the Senate over a partisan fight on overtime pay.

The setback leaves U.S. manufacturers and farmers facing rising tariffs on a wide array of exports to Europe, such as tomatoes, bed linen, hand tools, refrigerators and paper products.

The corporate tax and trade bill initially was strongly backed by both parties but that consensus fell apart under election-year pressure and sharp disagreement over the proposed overtime amendment.

Sen. Tom Harkin, Iowa Democrat, pressed a measure that would prevent any rollback of overtime pay in new federal regulations. Republican leadership tried to block consideration of the amendment in conjunction with the trade bill but fell short of the 60-vote tally necessary to end debate. The final vote was 51-47.

Senate Majority Leader Bill Frist, Tennessee Republican, said that the overtime debate was unrelated to the tax measure, and chastised Democrats for trying to link the two.

“Instead of being serious, they’re being frivolous. Instead of being responsible, they’re being political. And it’s just shameful,” Mr. Frist said on the Senate floor.

Rather than consider the overtime amendment, the bill was temporarily withdrawn from consideration as the two sides tried to work out a compromise. A spokeswoman for Mr. Frist said Republican leaders did not have a time frame to reconsider the bill.

Mr. Harkin and fellow Democrats had used the tax and trade legislation, dubbed the Jobs Act, to contrast their economic policies with Republicans. They insisted the overtime issue was relevant to the overall bill.

“How can any senator stand here on the floor with a straight face and say overtime is extraneous to a jobs bill?” Mr. Harkin said.

The Bush administration last year updated overtime regulations to reduce the number of white-collar workers who qualify for extra pay when they work more than 40 hours in a week. The administration said it was a necessary clarification and simplification of outdated regulations, while Democrats and organized labor contend it would end overtime pay for 8 million workers.

The Senate last year had voted to block the changes but the administration eventually prevailed when lawmakers signed off on the budget.

The overtime dispute has, for now, derailed the corporate tax and trade bill. The measure would end an export subsidy deemed illegal by the World Trade Organization, and instead offer an across-the-board tax cut to manufacturers and some multinational corporations.

The WTO ruling allowed the European Union to impose duties on U.S. products sold inside the 15-nation bloc. Europe is phasing in the penalties, starting at 5 percent this month and increasing 1 percentage point each month until Congress repeals the subsidies. The tariffs leave exporters in a difficult position.

“Further stalling of the legislative process is unacceptable. This is especially true for the Americans whose jobs may be lost due to the imposition of this tariff,” the U.S. Chamber of Commerce, the country’s largest business federation, said in a letter to the Senate.

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