House Republican negotiators yesterday beat back Senate efforts to regulate tobacco more aggressively and to more strictly limit tax shelters as a congressional conference committee moved toward approving the most significant corporate tax legislation in two decades.
The legislation, which began as a modest effort to repeal an illegal export subsidy, now contains 633 pages with nearly $150 billion in tax breaks to be granted over the next decade. The bill would cut taxes for restaurant owners and Hollywood producers; makers of bows, arrows, tackle boxes and sonar fish finders; NASCAR track owners and native Alaskan whalers; even foreign gamblers who win at U.S. horse and dog tracks. Those costs would be offset by closing tax loopholes and with other revenue-raising measures.
 
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The package has raised protests among budget watchdogs, liberal advocacy groups and the Bush administration, which said this week that the legislation has degenerated into a grab bag of special interest provisions that will benefit few and clutter an already bewildering tax code.
But the biggest legislative obstacle facing its final passage appears to be an unrelated buyout for tobacco farmers, tacked on to gain tobacco-state votes in the House. Some Republicans and Democrats in the Senate have threatened to torpedo the bill unless a $10 billion buyout is coupled with a provision to allow the Food and Drug Administration to begin regulating the content and sale of cigarettes.
"This airplane has lost a wing here," said Sen. Tom Harkin (D-Iowa), chastising Republican leaders for dropping the FDA regulatory provision, "and you know what happens to one-winged airplanes. They spin and crash and burn."
A bipartisan group of Senate negotiators approved an FDA regulatory provision yesterday during the House-Senate negotiations. But House Republicans were resolutely opposed.
Rep. Richard Burr (R-N.C.), who is in a tight Senate race in his tobacco-producing state, said tobacco faces enough federal regulation and charged that FDA control would spawn a black market for cigarettes.
"Our founding fathers, many of them grew tobacco," said Rep. Joe Barton (R-Tex.). "If they knew we were trying to regulate one of the first cash crops that made our nation independent, I don't think they would appreciate that."
Rep. Charles B. Rangel (N.Y.), the ranking Democrat on the Ways and Means Committee, retorted, "Maybe we shouldn't do everything our founding fathers did, because that would mean we would have to re-initiate slavery."
The fight over tobacco is likely to continue on the Senate floor, where Sen. Mike DeWine (R-Ohio) has pledged to bring down the entire bill if FDA regulation is not included. DeWine appears to have enough support to thwart passage before Congress adjourns at the end of the week.
