The drive to pass a US$136 billion corporate tax bill hit a roadblock in the US Senate when lawmakers upset about tobacco regulation, new overtime rules and combat pay employed delaying tactics to prevent a vote.
However, a deal was reached late Friday to schedule a vote on the legislation tomorrow. Supporters confidently predicted passage.
In an agreement Democrats reached with Republican leaders, the Senate will also cast two mainly symbolic votes on giving the Food and Drug Administration (FDA) the power to regulate tobacco and on blocking new overtime rules the Bush administration put into effect in August.
Senator Edward Kennedy, who led opponents in the delaying tactics, claimed victory with the agreement even though the measures will not be taken up by the House before lawmakers adjourn to campaign for re-election.
"We made real progress tonight in the fight to once and for all stop big tobacco from marketing cigarettes to our children," Kennedy said in a statement.
While the House has rejected FDA regulation of tobacco, Kennedy said he would keep pushing the issue in an upcoming special session expected later this year and in next year's regular session of a new Congress.
The House approved the corporate tax bill 280-141 on Thursday night with 73 Democrats supporting the bill. Democratic support in the Senate is also expected to be substantial, given that the measure is chock-full of tax breaks designed to appeal to a wide array of interests.
But senators who support the regulation of tobacco by the FDA were unhappy that this provision was stripped out of the tax measure by a House-Senate conference committee which did retain a US$10.1 billion buyout for tobacco farmers' Depression-era quotas.
During floor debate Friday, Kennedy complained that House Republicans on the conference committee had insisted the FDA tobacco provision be stripped away. from prevented rejected the attempt by senators to keep FDA regulation in the bill.
Regulation is needed to help keep children from becoming addicted to cigarettes, Kennedy argued.
Senators were also upset about the removal of two other Senate provisions -- blocking implementation of overtime rules that opponents contend will deny millions of Americans overtime pay and providing a tax credit to companies that make up the lost pay of employees who are called up to serve in the National Guard or military reserve units.
Senator Mary Landrieu said the employer credit for bridging the gap between what workers earn in the military and what they earn in their civilian jobs would have cost US$2 billion in a tax bill that included US$136 billion in tax breaks for such interests as NASCAR race track owners, importers of Chinese ceiling fans and some of the largest corporations in the US.
"How can I go home and say I am sorry that we didn't have any money to hand out to our guard and our reserve?" she asked.
The centerpiece of the tax legislation pending before the Senate would provide US$76.5 billion in tax relief for the country's beleaguered manufacturing sector and other US "producers" -- broadly defined to include construction companies, architects, engineering firms, film and music companies and oil and gas companies.
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