- The Washington Times - Sunday, October 10, 2004

ASSOCIATED PRESS

The Senate yesterday saw its effort to pass a sweeping corporate tax bill grind to a halt in the face of delaying tactics by a senator from Louisiana, who was upset the measure did not include pay support for members of the reserves and National Guard.

By a 66-14 vote, lawmakers did agree to limit debate on the tax bill, which provides $136 billion in new tax breaks for businesses and $10.1 billion to buy out tobacco farmers’ government quotas.

But hoped-for final passage of the measure was delayed until today because of objections from Sen. Mary L. Landrieu, Louisiana Democrat.

Mrs. Landrieu sought to get approval for another bill that would give employers a tax credit if they make up the pay their employees lose when they are called to active duty in the reserves or National Guard.

Mrs. Landrieu’s proposal would provide a 50 percent tax credit to employers for up to $30,000 in salary payments per year, and was estimated to have a $2.5 billion cost over 10 years.

That proposal was in the Senate version of the corporate tax bill but got stripped out of the compromise reached by a House-Senate conference committee.

In addition to the fight over active-duty pay, Sen. Tom Harkin, Iowa Democrat, was blocking final passage of a $14.5 billion hurricane and farm disaster package and a $33 billion bill financing the Department of Homeland Security because he was unhappy that funding was cut for an agriculture conservation program.

Senate Majority Leader Bill Frist, Tennessee Republican, said he planned votes for today to end the filibuster effort on the disaster aid and homeland security bills.

Tempers grew short during the rare Sunday session. Republicans fumed about the delay that was forcing the Senate into overtime when they had hoped to adjourn on Friday to go home and campaign. The House wrapped up business on Saturday.

Sen. Rick Santorum, Pennsylvania Republican, complained that “what is going on in the United States Senate is political demagoguery at the highest levels.”

But Mrs. Landrieu said her campaign was having an impact. She released a batch of e-mails her office had received in support of her delaying tactics. One e-mail said, “Please continue your fight for our soldiers.”

The tax package offers $136 billion in tax breaks to beleaguered U.S. manufacturers and an array of other interests.

Both sides predicted lopsided approval of the bill in the Senate, which will send the measure to President Bush for his signature. The package, the most sweeping overhaul of corporate tax law since 1986, provides a wide range of tax benefits for native Alaskan whalers, importers of Chinese ceiling fans and NASCAR racetrack owners.

The centerpiece of the tax legislation is $76.5 billion in new tax relief for the battered manufacturing sector, which has lost 2.7 million jobs over the past four years. But manufacturing is defined broadly to include not just factories but also oil and gas producers, engineering, construction and architectural firms and large farming operations.

The bill was seen as must-pass legislation because it repeals a $5 billion annual subsidy for U.S. exporters that has been ruled illegal by the World Trade Organization. Because of that ruling, 1,600 American exports to Europe have been hit by penalty tariffs that now stand at 12 percent and are rising by one percentage point per month.

Some senators were also upset the final version of the corporate bill dropped a provision that had been in the Senate version of the bill that would have given the Food and Drug Administration the power to regulate tobacco, a change they saw as critical in the campaign to stop children from getting hooked on cigarettes.

The bill does provide a $10.1 billion buyout for tobacco farmers.

“This bill is of the elite corporate interests, by the elite corporate interests, for the elite corporate interests,” said Sen. Edward M. Kennedy, Massachusetts Democrat. “It’s a lobbyist’s dream and a middle-class nightmare.”

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