Republicans Press Tax, Medicare Issues

Sen. John McCain, R-Ariz. talks to reporters outside the West Wing of the White House in Washington, Wednesday, Dec. 6, 2006 after attending a meeting between President Bush and members of Congress. (AP Photo/Gerald Herbert) (Gerald Herbert - AP)

WASHINGTON -- Lawmakers on Thursday pieced together legislation extending popular tax breaks and saving doctors from a cut in Medicare payments as Republicans prepared to cede control of Congress to the Democrats.

House GOP leaders exiting power delayed a vote after it became clear it couldn't occur until well after midnight. The House vote was rescheduled for Friday. In the Senate, leaders were experiencing lingering unhappiness with the bill from several GOP senators, especially over extending trade benefits for textile exports from Haiti.

The legislation also contained several trade-related measures, including extending normal trade status to Vietnam.

Action on the tax and trade legislation and a subsequent vote on a bill to keep the government running through Feb. 15 were the chief obstacles to concluding the turbulent 109th congressional session.

It was hardly the first time the GOP-controlled Congress had employed a secretive, closed-door process to assemble important legislation. Still, Democrats supported the contents of the bill _ if not the way it was put together.

"This is not a perfect bill, but it renews tax cuts Americans need right now, like the college tuition deduction, and makes sure that Medicare and Medicaid patients will have access to care next year," said Sen. Max Baucus of Montana, top Democrat on the Finance Committee.

But the massive measure _ containing much to please lawmakers and their constituents _ also generated opposition. Sen. Judd Gregg, R-N.H., for example, was unhappy about its cost and a multibillion-dollar move to expand health care for retired coal miners.

Under Senate rules, a single senator can force considerable delay once a bill comes over from the House.

"It's no better than 50-50 right now," Senate Minority Leader Harry Reid, D-Nev., said Thursday afternoon. Prospects among Senate Democrats improved; but the House, for reasons not altogether clear, went in to a recess that lasted more than five hours.

Lawmakers from states such as Georgia, Illinois and Massachusetts were unhappy that House Republicans cut out a plan to ease looming budget shortfalls in a federal-state program providing health insurance coverage to low-income children. And New Yorkers seethed after Republicans dropped tax incentives for a rail link from Manhattan to Kennedy Airport.

At the same time, lawmakers were generous with tax-free health-savings accounts used chiefly by higher-income taxpayers, increasing contribution limits at a cost of $1 billion over the next decade.

Democrats mostly went along with extending expired tax breaks. They include a research and development tax credit, worth $16.5 billion, and a sales tax deduction for people in states without income taxes, at a cost of $5.5 billion. All told, the tax cuts would cost $38 billion over five years.