WASHINGTON, Oct. 5 (UPI) -- After adding a host of special-interest tax cuts aimed at garnering support from individual senators for the overall bill, the congressional Republican leadership is poised to gain approval for a corporate tax bill this week that would give $137 billion in tax cuts for corporations.
After months of stalled action on the bill, House Ways and Means Committee Chairman Bill Thomas, R-Calif., was expected to push a GOP-backed version of the bill through House-Senate conference Tuesday.
House Majority Leader Tom DeLay, R-Texas, said that despite reports that the White House wants to delay approving the measure until after the election, it would move forward quickly.
"We are on track to get that bill done, hopefully by the end of the day and vote on it tomorrow," said DeLay.
Thomas's bill includes more breaks for multinational companies than included in the original House and Senate versions, but at its core is an expanded reduction in the effective tax rate for manufacturers that is projected to cost $76.5 billion over 10 years.
The benefits go past the traditional definition of such producers to include other sectors like homebuilders, electricity producers, architectural firms and filmmakers.
The measure also includes an array of breaks for other sectors -- including farmers, fishermen and ethanol producers -- aimed at shoring up election-year support for lawmakers.
And while the measure is expected to gain House approval, proponents of the measure do face a few hurdles for passage this week, including a potential lack of the votes needed for Senate passage and an administration threat to gut the bill.
The underlying bill was developed as a vehicle to repeal the foreign sales corporation tax cut -- a $50 billion tax break for exporting firms that has been deemed illegal by the World Trade Organization -- in order to stop European Union sanctions on more than 1,600 U.S. exports that now stand at 12 percent and increase monthly.
But the legislation ballooned into a monster with conventional wisdom holding that any lobbyist worth his salt has at least one break for their corporate clients included in the list.
The bill is reportedly paid for fully by raising revenue in various ways, including a crackdown on corporate tax-avoidance schemes and a renewal of existing Customs Service user fees.
Many of those provisions are opposed by a wide range of business and tax lobbyists, and House Republican leaders removed some included in the Senate version of the bill, including one that would increase the penalties for using complex accounting transactions designed solely to save taxes.
Another Senate-approved provision removed from the final bill would have required companies promoting tax shelters to provide a list of customers to the Internal Revenue Service.
Also included in the bill is a controversial provision that would allow a state sales-tax deduction on federal returns for those in states without income taxes.
Thomas also included some energy-related tax breaks in the bill, but House and Senate conferees hashing out the final measure rejected an effort Tuesday to add additional credits for the use of alternative fuels and renewable energy sources.
At the meeting of conferees, Thomas also told House Energy and Commerce Chairman Joe Barton, R-Texas, that his effort to add a massive stalled energy bill to the tax measure exceeded the scope of the bill.
Despite the list of add-ons to gain the support of individual members, as it now stands the bill still faces strong opposition from several interests.
Sen. John McCain, R-Ariz., told United Press International that the measure demonstrates how broken the legislative system is because whenever a must-pass legislative vehicle comes along, it is loaded down with unrelated pork.
He added that a simple measure dealing with the $50 billion change needed to fix the foreign sales corporation tax credit is all that is called for.
"I will never support it as it is," said McCain. "Sooner or later something has to happen. Why don't we (just) pass a clean bill?"
Another problem came in the form of a letter sent by Treasury Secretary John Snow to lawmakers Monday listing a variety of problems with the bill's "special interest tax provisions" that calls for the removal of at least some of them, saying that they go beyond the intent of a bill to replace the offending tax credit with something that is WTO-compliant.
"The administration will work with the conferees to eliminate these narrowly crafted provisions," wrote Snow, who stopped short of issuing a veto threat.
But the measure faces arguably its greatest problem from Democrats in the Senate over the removal of provisions providing the Food and Drug Administration with the ability to regulate tobacco.
The move faces strong opposition not only from a host of tobacco concerns, but also from some advertising interests concerned that giving the agency the ability to regulate advertising of tobacco sets a bad precedent.
The tobacco provision was tied to a $10.1 billion tobacco-company-sponsored buyout of the Depression-era federal subsidy program for tobacco farmers in order to win votes for passage of the initial bill among Democrats and some Republicans in the Senate.
While opposed by a myriad of tobacco-industry interests, the move to regulate tobacco has the support of the nation's largest cigarette manufacturer, Phillip Morris, and several public-health and advocacy groups like the Campaign for Tobacco-Free Kids.
Although Thomas removed the FDA provision, as was predicted by some proponents, the Senate version of the buyout remains in the bill.
The removal of the FDA provision has raised the specter of the measure failing to gain approval in the Senate.
Sen. Tom Harkin, D-Iowa, has said that as it stands the bill would draw a sustainable filibuster, and Sens. Mike DeWine, R-Ohio, and Ted Kennedy, D-Mass., have threatened to filibuster any final bill that does not include the FDA provision.
Senate GOP aides said that while they are still working the bill, they believe the anti-tobacco interests in the Senate do not have the votes to keep the measure from becoming law without an FDA provision.
Senate Minority Leader Tom Daschle, D-S.D., also said Tuesday that he did not expect a filibuster over the issue.
A spokesman for Kennedy, Jim Manley, told UPI that the senator had ruled nothing out if the FDA provisions are not included and that the senator began reaching out to other members on the issue last week in hopes of creating a coalition of interest in opposition to the bill.
Kennedy and Rep. Henry Waxman, R-Calif., both members of the conference committee drafting the final bill, failed in their effort Tuesday to put FDA controls back into the bill in conference.
"The lack of FDA regulations put the bill seriously in jeopardy in terms of Senate passage," said Manley.
Whether Kennedy can put together a coalition strong enough to kill the bill remains to be seen, but GOP leaders appear confident they can get the measure approved as it stands.
Stuart Roy, spokesman for DeLay, told UPI that while he was unsure of its prospects for the bill in the upper house of Congress, he ultimately expects it to be approved.
"Usually when you pass a bill in conference you work with the other body to see if it can pass," said Roy.
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