GOP factions battle over spending curbs
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| Wed, 05-12-2004 - 12:15pm |
Wednesday, May 12, 2004 · Last updated 3:12 a.m. PT
GOP factions battle over spending curbs
By ALAN FRAM
ASSOCIATED PRESS WRITER
WASHINGTON -- Republicans are criticizing four moderate GOP senators for voting to exempt proposed jobless benefits from the very curbs on tax cuts and spending that they want included in the 2005 budget.
Firing back, the moderates said Tuesday there is nothing wrong with setting procedural hurdles for items that will worsen the federal deficit and then voting to clear those hurdles for deserving programs.
Tensions have escalated as stalled House-Senate bargaining on a compromise $2.4 trillion budget moves well into its second month. Those talks have stalled over the moderates' insistence on including restrictions on new tax reductions and could derail the budget entirely by next week.
"I'm amused by the number of people who say, 'Oh yes, we want deficit reduction, we want" limits on new tax reductions and spending, said Senate Budget Committee Chairman Don Nickles, R-Okla.
He aimed his comments at Democrats and moderate Republicans who minutes later voted in favor of waiving a current, weaker version of the restrictions so unemployment benefits could be extended. The effort to exempt unemployment coverage from the limits fell just short of the 60 votes needed, 59-40, and the benefits were killed.
Moderates have voted before to get around the limits they support, irking Republican leaders.
Maine's two moderate GOP senators, Susan Collins and Olympia Snowe, voted last week to waive the restrictions for a plan to expand job training. Under pressure from their leaders, many House moderates have twice opposed nonbinding but politically potent provisions voicing support for the limits.
"I think you should have a higher barrier to surmount" for tax cuts or new spending, said Collins. "That doesn't mean in some cases I won't vote for higher spending or additional tax cuts."
Voting with Snowe and Collins Tuesday to sidestep the restrictions were moderate Sens. Lincoln Chafee, R-R.I., and John McCain, R-Ariz.
If the impasse forces the two chambers' GOP leaders to abandon efforts to push a compromise budget through Congress, it would be an election-year embarrassment and make it harder to complete future tax and spending bills.
Senate Democrats and four moderate Republicans want to require that any new tax cuts or expanded benefits be paid for with other budget savings. Sixty of the 100 senators could vote to waive the restriction.
President Bush and GOP leaders want the restrictions to apply only to new spending, not tax cuts. Without support from at least two of the moderate Republicans - or a moderate Democrat like Sen. Ben Nelson of Nebraska - the GOP will lack the votes to push a budget through the closely divided Senate.
"Hypocrisy," Sean Spicer, spokesman for the GOP-run House Budget Committee, said in an e-mail Tuesday of the moderates' votes. "Apparently, only certain spending needs to be offset."
"I try to exert as much discipline as I can on spending, but there are some areas I feel strongly about" such as jobless benefits, Chafee said.
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Senate passes tax bill
U.S. firms win big; Europe tiff a factor.
http://www.fortwayne.com/mld/journalgazette/news/nation/8647945.htm
The Senate broke a two-month deadlock Tuesday and approved a major corporate tax bill that would shower U.S. corporations with billions in new tax breaks and end a trade dispute with Europe.
The bill, approved 92-5, would provide $170 billion in corporate tax cuts over the next decade to replace export subsidies previously granted to U.S. firms by Congress that prompted $4 billion in retaliatory tariffs by the European Union.
A different House version of the legislation has been stalled for months by disagreements among Republicans in that chamber. Senate passage could help break the House logjam in time for enactment of the legislation later this year.
The Senate impasse ended after Democrats consented to limit debate in exchange for an agreement from Republicans to allow a vote on extending supplementary unemployment benefits for 13 weeks, an election-year priority for the Democrats.
But the vote on the unemployment measure turned into an embarrassment for Sen. John Kerry, D-Mass., the presumptive Democratic presidential nominee. The Senate voted 59-40 in favor of the proposal, one vote short of the 60 needed for approval. Kerry, who favored extending jobless benefits, was campaigning in Kentucky and was the only senator to miss the vote.
The corporate tax measure was prompted when the World Trade Organization outlawed about $5 billion in U.S. export subsidies and the European Union imposed retaliatory tariffs on many American-made products. The duties, imposed in March at 5 percent, are now 7 percent and will rise monthly until they reach 17 percent in March.
The legislation began as an effort to compensate U.S. exporters for loss of their subsidies but ballooned into something far larger: hundreds of pages' worth of tax breaks to help domestic manufacturers, curb corporate tax abuses and bestow favors on special interests ranging from cruise ship operators to NASCAR track owners.
It would reduce income taxes for American manufacturers and includes scores of provisions that have been characterized by critics as a bonanza for special interests but defended by supporters as needed incentives for job creation.
It would also allow U.S. companies to bring profits earned overseas back to this country at a discounted rate for one year, put new limits on federal contractors outsourcing work and make it less profitable for companies to move headquarters abroad to avoid U.S. taxes.
The $170 billion price tag would be offset by repeal of the export subsidies and by curbing a number of corporate tax abuses by increasing penalties for violations.
In addition to its original corporate tax breaks, the bill was expanded several weeks ago to include $14 billion in tax incentives for energy production. The proposals were plucked out of the comprehensive energy bill that is stymied in the Senate, adding to the debate over special-interest favors.
A proposal by Sen. John McCain, R-Ariz., to strip out the energy provisions failed, 85-13, after senators of both parties argued that the tax breaks would help increase domestic production and create jobs.