Republicans push tax bill through the House before Democrats take over

Friday, December 8th 2006, 11:22 pm

By: News On 6

WASHINGTON (AP) Rejected by voters and limping off stage, the Republican-led House on Friday passed a sweeping bill reviving expired tax breaks and protecting doctors from a big cut in Medicare payments.

But they dumped an unfinished budget on the Democrats about to take power, passing by a 320-70 vote a stopgap spending bill putting the government on autopilot until Feb. 15. The Senate planned a pre-midnight vote to avoid a government shutdown.

The failure to pass budget bills for domestic agencies, said Rep. David Obey, D-Wis., amounted to "a blatant admission of abject failure by the most useless Congress in modern times."

Working into the night, the House also passed a package of trade bills and debated a measure to keep the government running into next February. Under a complicated procedural pirouette, the tax and trade legislation -- along with a plan to open 8.3 million acres in the Gulf of Mexico to oil and gas drilling -- was to be bundled together and sent to the Senate, where a handful of Republicans threatened delay.

A weekend Senate session loomed as Republican budget hawks bridled at the measure's cost and textile state senators objected to trade provisions benefiting Haiti. The House passed the trade bill by a 212-184 vote.

The 367-45 vote on the tax bill reflected widespread bipartisan support for extending expired tax breaks, including the research and development tax credit for businesses, sales tax deductions for people in states without income taxes, the tax deduction on college tuition, a tax credit for hiring welfare recipients and others facing difficulties finding jobs and tax credits for alternative energy producers and purchases of solar energy equipment by homeowners and businesses.

All told, the tax cuts would cost $38 billion over five years.

Also driving the massive bill forward was an effort to prevent a 5 percent cut in Medicare payments to doctors scheduled to take effect Jan. 1 under a complicated government funding formula. But the GOP-crafted solution to the problem was criticized as an accounting gimmick since it would double the cost of fixing the problem again next year.

Lawmakers faced a midnight deadline to send President Bush a bill to keep domestic federal agencies from shutting down. With work unfinished of nine of 11 spending bills, a stopgap funding bill would put 13 Cabinet departments on autopilot through Feb. 15 frozen at or slightly below current levels.

Democrats face difficult choices and weeks of work on the leftover budget mess, which totals $463 billion and must be passed at Bush's strict budget limits.

"They are leaving us with a tremendous mess," Senate Minority Leader Harry Reid, D-Nev., told reporters. "We have alternatives, none of which are very good."

Democrats made good on a promise to block an automatic congressional pay raise until the minimum wage is increased. Under pressure from future House Speaker Nancy Pelosi, D-Calif., and Reid, GOP leaders added language to the stopgap funding bill language stopping the pay raise slated for Jan. 1 until Feb. 16.

Now, if the pay raise goes into effect Feb. 16, members would lose some $320 of their anticipated $2,800 annual increase. That raise would be $3,300 if Congress acts to boost the cost-of-living allowances for all federal employees in 2007. Currently, rank-and-file members get $165,200.

The House also approved, 330-59, an agreement to allow U.S. shipments of civilian nuclear fuel to India, an administration priority that is opposed by some because India, which has nuclear weapons, has not submitted to full international inspections.

The House approved by a voice vote a bill to keep open a special investigative office that has unearthed millions of dollars in waste and fraud in the rebuilding of Iraq. The office, which was set to end operations by October 2007, would stay open for an extra year under the bill, passed earlier by the Senate.

As is often the case at the end of the session, congressional leaders tried to lump popular items -- extending the expired or expiring tax breaks -- with other more contentious measures. Conservatives griped that the popular bills attracted costly add-ons benefiting retiring Republicans such as Majority Leader Bill Frist of Tennessee, who obtained $30 million in concessions for hospitals in his state that treat large numbers of low-income patients.

The trade portion establishes permanent normal trade relations with Vietnam, which is generally supported, with the extension of trade benefits for sub-Saharan Africa, Haiti and Andean nations. The Haiti provisions in particular raised red flags with lawmakers trying to protect home state textile industries.

Eight GOP senators from North and South Carolina, Georgia, Alabama and Kentucky on Thursday wrote congressional leaders saying 100,000 textile jobs in their region had already been lost due to trade agreements and they would oppose "as forcefully as possible" the Haiti measure.

Then there was Senate Budget Committee Chairman Judd Gregg, R-N.H., who gave an extraordinary floor speech lambasting his party for losing its way on fiscal discipline and his leadership for jamming it past rank-and-file Republicans opposing the massive measure.

Gregg particularly objected to a provision tucked into the tax bill to expand federal funding for the health benefits of retired coal miners at a cost of some $5 billion over 10 years.

"You just have to ask yourself how we, as a party, got to this point, where we have a leadership which is going to ram down the throats of our party the biggest budget buster in the history of the Congress under Republican leadership," Gregg said.