A paragraph in yesterday's Washington Post erroneously described a provision added to the tax bill as allowing corporations to accrue pretax profits in a reserve fund without paying the tax now levied on accumulated earnings. Actually, the proposal affects aftertax profits. The administration opposed a more generous version of the bill, but accepted the provision as a compromise. Monies is the fund would be used to pay product liability claims. At another point in the same article, a provision that would guarantee teachers vesting rights in pensions when they change jobs inadvertently was described as applying to the Teamsters Union.
he Senate voted 62 to 28 yesterday to prohibit further extraneous amendments to the $30 billion tax cut bill and resume consideration of the bill itself.
The decision to invoke cloture blocked liberals from adding to the tax bill several other important but faltering bills they favor, including the Humphrey-Hawkings "full employment" bill and the so-called sunset bill requiring periodic reauthorization of most spending programs.
The cloture vote-which came on a petition by Majority Leader Robert C. Byrd (D. W. Va) - may have killed some of these bills for this Congress.
In another vote yesterday, the Senate defeated easily, 61 to 17, another of President Carter's tax "reform" proposals, plan to repeal a provision that now allows multinational corporations to defer the taxes on foreign profits until those profits are brought home.
That vote marked the second of Carter's few remaining "reform proposals the Senate has rejected since debate began last Friday. Earlier, senators voted 49 to 9 drop Carter's plan to repeal business deductions for the celebrated "three-martini lunch."
The Senate also, in a show of budget discipline, defeated a proposal by Sen. H. John Heinz III (R-Pa) that would have allowed families having elderly persons in the household to claim a tax credit of $75-ostensibly to help offset increased energy-costs.
The proposal, which would have applied to families with incomes of $7,500 or less, with partial benefits for those earning up to $12,000, would have cost $1.2 billion. The vote to table the measure was 65 to 22.
Sen. Edmund S. Muskie (D-Maine), as chairman of the Budget Committee, warned the Senate the tax bill already, was $1.4 billion over Congress' tiscal 1979 budget, and could end up costing the Treasury as much as $50 billion in lost revenues by 1983.
The vote on cloture effectively cleared the way for the Senate to get down to business on the basic provisions of the tax bill, with a possibility it might complete the measure today.
The omnibus bill, with earlier tax giveaways amounting to $30 billion-a full $10 billion over what Carter has requested-contains $20.5 billion in tax cuts for individuals, $5.3 billion for business and $2.6 billion in reductions in capital gain taxes.
Included in the total is an extra $4.5 billion the Senate approved on Saturday for taxpayers in the $10,000 to $30,000 brackets. By contrast, the House has passed a $16.3 billion tax bill, with $10.4 billion in cuts for individuals.
The vote to shut off extraneous amendments came after Sen. Russell B. Long (D-La.), chairman of the Finance Committee, warned senators bluntly they had better invoke cloture or they would not be able to adjourn in time to campaign.
Waving a sheaf of 152 proposed riders and amendments, Long shouted, "Just look at all the other amendments that are here. We've got to end it now or otherwise the Oct. 14 adjournment date is out. We'll be here in November."
Long was opposed by Muskie sponsor of the sunset legislation, and other liberals who sought to tack on major social legislation that had not made it to the Senate floor on its own.
Besides the sunset and Humphrey Hawkins bills, the list of possible riders included hospital cost containment legislation, the sugar bill and a measure to bar the administration from offering concessions on textiles in the current trade talks.
Under Senate procedures, after cloture is invoked any new attempt to bring such matters up as amendments to the tax bill can be ruled out of order. Immediately after the cloture vote, the Humphrey-Hawkins rider and several others were declared non-gemane.
The Senate did approve a series of narrow-interests amendments that just made it through under the wire before the cloture vote.
The provisions would:
Allow corporations a sizeable tax break by enabling them to carry back losses stemming from product liability claims for a full 10 years instead of the three years allowed now, and permitting them to set up a tax-free reserve fund for claims.
The provision allowing the establishment of reserve funds was slipped through apparently without the knowledge of the Treasury, which oppowed the measure. Currently, corporations which accrue large amounts of before-tax income are required to pay tax on what they have accumalted.
Expand the Internal Revenue Service's quick "small tax-case procedure" to include disputes by taxpayers involving up to $5,000, rather than the $1,500 limit now in force.
Insure that members of the Teamsters Union are vested for pension purposes if they change jobs.
Allow heirs who are maintaining family farms to qualify for special tax treatment under the 1976 Tax Reform Act to let banks claim first lien on their property for loan purposes, rather than having to yield to the IRS, as required under present law.