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Archive for December 9th, 2006

GOP pushes tax bill through Congress

WASHINGTON – In its last hours of GOP control, Congress passed a raft of bills big and small, most significantly a sweeping bill reviving expired tax breaks, extending trade benefits for developing countries and protecting doctors from a big cut in Medicare payments.

The Senate cleared the bill for President Bush’ s signature early Saturday by a 79-9 vote. Final adjournment followed after the House and Senate cleared away a bevy of other legislation, including bills reauthorizing health research programs at the National Institutes of Health and an overhaul of fisheries management.

Speaker Dennis Hastert, R-Ill., gaveled the House to a close for the last time about 3:15 a.m.; the Senate limped to a close about 4:40 a.m.

Republicans dumped an unfinished budget on the Democrats about to take power, with the Senate barely meeting a midnight deadline to pass a stopgap spending bill putting the government on autopilot until Feb. 15. Bush quickly signed the bill on Saturday.

The failure to pass budget bills for domestic agencies, said Rep. David Obey (news, bio, voting record), D-Wis., amounted to “a blatant admission of abject failure by the most useless Congress in modern times.”

The House easily passed the tax and Medicare provisions — along with a plan to open 8.3 million acres in the Gulf of Mexico to oil and gas drilling. The vote was 367-45. It passed the trade legislation by a narrower 212-184 vote.

The legislation was then bundled and sent to the Senate for a single vote, where its popularity easily vanquished a handful of GOP opponents. Republican budget hawks bridled at the measure’s cost and textile state senators objected to trade provisions benefiting Haiti.

The sweeping votes reflected widespread bipartisan support for extending expired tax breaks, including the research and development tax credit for businesses, sales tax deductions for people in states without income taxes, the tax deduction on college tuition, a tax credit for hiring welfare recipients and others facing difficulties finding jobs and tax credits for alternative energy producers and purchases of solar energy equipment by homeowners and businesses.

All told, the tax cuts would cost $38 billion over five years.

Also driving the massive bill forward was an effort to prevent a 5 percent cut in Medicare payments to doctors from taking effect Jan. 1. The GOP-crafted solution to the problem was criticized as an accounting gimmick since it would double the cost of fixing the problem again next year.

On the rest of the budget, work remained unfinished on nine of 11 spending bills, requiring the stopgap funding bill to put 13 Cabinet departments on autopilot through Feb. 15 frozen at or slightly below current levels.

Democrats now face difficult choices and weeks of work on the leftover budget, which totals $463 billion and must be passed at Bush’s strict budget limits.
“They are leaving us with a tremendous mess,” Senate Minority Leader Harry Reid, D-Nev., told reporters. “We have alternatives, none of which are very good.”

Democrats made good on a promise to block an automatic congressional pay raise until the minimum wage is increased. Under pressure from future House Speaker Nancy Pelosi, D-Calif., and Reid, GOP leaders added language to the stopgap funding bill language stopping the pay raise slated for Jan. 1 until Feb. 16.

Now, if the pay raise goes into effect Feb. 16, members would lose about $320 of their anticipated $2,800 annual increase. That raise would be $3,300 if Congress acts to boost the cost-of-living allowances for all federal employees in 2007. Currently, rank-and-file members get $165,200.

The House also approved, 330-59, an agreement to allow U.S. shipments of civilian nuclear fuel to India, an administration priority that is opposed by some because India, which has nuclear weapons, has not submitted to full international inspections. The Senate followed suit and sent it to the White House.

The trade measures establishes permanent normal trade relations with Vietnam, which is generally supported, with the extension of trade benefits for sub-Saharan Africa, Haiti and Andean nations. The Haiti provisions in particular raised red flags with lawmakers trying to protect home state textile industries.

Eight GOP senators from North and South Carolina, Georgia, Alabama and Kentucky on Thursday wrote congressional leaders saying 100,000 textile jobs in their region had already been lost due to trade agreements and they would oppose “as forcefully as possible” the Haiti measure. But of the eight, only Lindsay Graham, R-S.C., and Richard Burr, R-N.C., followed through on threats to oppose the Haiti trade preference after it was added to the broader bill.

Senate Budget Committee Chairman Judd Gregg, R-N.H., gave extraordinary floor speeches lambasting his party for losing its way on fiscal discipline and its leadership for jamming the bill past rank-and-file Republicans opposing the massive measure.

Gregg particularly objected to a provision tucked into the tax bill to expand federal funding for the health benefits of retired coal miners at a cost of some $5 billion over 10 years.

“You just have to ask yourself how we, as a party, got to this point, where we have a leadership which is going to ram down the throats of our party the biggest budget buster in the history of the Congress under Republican leadership,” Gregg said.

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