The Senate gave final approval yesterday to the most significant corporate tax legislation in nearly 20 years, sending President Bush a 650-page measure that reduces taxes for domestic manufacturers, builders and even Hollywood studios and doles out scores of tax breaks for interests ranging from tackle box makers to Native Alaskan whaling captains.
The 69 to 17 vote, taken in a rare holiday session, belied the acrimony underlying the measure, which includes $143 billion in tax breaks over 10 years, offset by loophole closures and other revenue raisers. The House passed it Thursday night by a similarly comfortable margin, 280 to 141, and White House aides say Bush will sign it into law, despite strong criticism leveled last week by Treasury Secretary John W. Snow.
Sen. Mary Landrieu (D-La.) agreed to a final vote on the corporate tax bill after Senate leaders attached a tax break she sought to a different bill.
(Charles Dharapak -- AP)
House Blocks FDA Oversight of Tobacco (The Washington Post, Oct 12, 2004)
Senate Vote on Tax Bill Cleared (The Washington Post, Oct 11, 2004)
The Tax-Cut Pendulum and the Pit (The Washington Post, Oct 8, 2004)
Conferees Agree on Corporate Tax Bill (The Washington Post, Oct 7, 2004)
Tobacco Rider Adds Fire to Debate Over Corporate Tax Bill (The Washington Post, Oct 6, 2004)
Tax-Cut Bill Draws White House Doubts (The Washington Post, Oct 5, 2004)
Proposal Seeks Wider Tax Cuts For Industries (The Washington Post, Oct 1, 2004)
Public health groups were infuriated that a $10 billion buyout for tobacco farmers was included without a provision to grant the Food and Drug Administration authority to regulate cigarettes. Charitable organizations protested a revenue-raising measure that would greatly reduce the value of automobiles donated to charities.
But threatened filibusters over the tobacco provision and the bill's failure to include a tax break for employers of National Guard members and reservists fizzled yesterday. Sen. Mary Landrieu (D-La.) agreed to a final vote after Senate leaders attached her $2.5 billion Guard-and-reserve tax break to a different bill. Sen. Mike DeWine (R-Ohio) dropped his threat over the tobacco provision when he was promised a separate vote on an FDA regulation bill.
The Senate vote cleared the way for Congress to adjourn for the campaign season. After the tax bill passed, the Senate quickly approved measures to fund homeland security and military construction for the fiscal year that began Oct. 1. Congress will return after the election to pass most of the bills that will fund the government this fiscal year. If House and Senate negotiators can work out compromise legislation to reform the nation's intelligence programs, then lawmakers may be called back briefly to ratify the deal shortly before the Nov. 2 election.
Senate Majority Leader Bill Frist (R-Tenn.) said he expects to know within two days whether Congress will finish work on the intelligence bill in time for enactment before the election.
Adjournment had been held up for days by legislative brushfires that erupted over the corporate tax bill. Proponents hailed it as a job creation measure that would simplify the nation's Byzantine tax laws for multinational corporations, address long-festering grievances and clamp down on loopholes, such as one that allows companies to escape taxation by reincorporating at a post office box in an offshore tax haven.
"This bill is basically about manufacturing jobs," said Senate Finance Committee Chairman Charles E. Grassley (R-Iowa). "Let the record be clear, this bill is fair. This bill is balanced."
But critics -- including budget watchdogs and liberal activists -- decried what they saw as a cornucopia of special-interest tax cuts that would complicate the tax code, favor companies doing business overseas and ultimately worsen the budget deficit. Sen. John McCain (R-Ariz.) pronounced it "disgraceful" and "a classic example of the special interests prevailing over the people's interest."
Ron Field, vice president of public policy for Volunteers of America, a national volunteer social service program, said: "Congress is turning its back on the very service organizations it claims to support through faith-based and community initiatives, while providing billions of dollars in new tax breaks to wealthy corporations."