Senate poised to pass tobacco buyout in tax bill deal
Thursday, July 15, 2004 5:45:19 PM
WASHINGTON (AFX) -- The Senate was expected to amend a corporate tax bill Thursday with a provision that would spend $13 billion to end price supports for tobacco farmers and also allow the Food and Drug Administration to regulate tobacco products
The provision was designed to end an impasse that was holding up House-Senate negotiations on a wide-ranging corporate tax bill, designed in part to end the billions of dollars in punitive European tariffs imposed on U.S. goods after a portion of the U.S. tax code was deemed an illegal export subsidy by the World Trade Organization
The House had added a $10 billion tobacco buyout to its version of the corporate tax bill to attract votes from tobacco-state lawmakers
But efforts to add similar language to the Senate version resulted in a deadlock that pitted tobacco-state senators against Senate Democrats who have called for FDA regulation of the sale and marketing of tobacco products
Senators appeared to be grudgingly appeased by the provision and likely to approve the amendment drafted by Sens. Mike DeWine, R-Ohio, and Edward Kennedy, D-Mass
Sen. Jim Bunning, R-Ky., said he wasn't "comfortable" with giving the FDA expanded regulatory powers, but said tobacco growers in his state "desperately need help." "I think FDA regulation is a very steep price to pay for a buyout, but if it's the only way to get my growers relief, this senator will vote for it," Bunning added
The buyout would pay farmers $13 billion over six years to give up federal tobacco quotas. Bunning said the plan would allow many farmers to pay off debts, leave the tobacco business and retire
Sen. Dick Durbin, D-Ill., declared he had to "swallow hard" to accept a plan that would pay billions to growers who had already received taxpayer subsidies over the years, but was willing to do so "if that's the only way that we can get FDA regulation of tobacco products in America." "That is a painful compromise to think of that much money, but that is the reality," he said
The fate of the tax bill remains unclear, however. House Ways and Means Committee Chairman Bill Thomas, R-Calif., expressed doubts on Wednesday over whether Congress can complete work on the package ahead of the November elections, blaming Senate Minority Leader Tom Daschle, D-S.D., for insisting that Democratic priorities be addressed before allowing House-Senate negotiators to begin a conference to iron out differences between the two bills
Democrats have complained that Republicans have dragged their feet on the legislation, failing to take serious action until after the EU began imposing sanctions
The EU imposed the tariffs earlier this year and has been ratcheting them higher by 1 percentage point a month, in accord with the terms of the WTO ruling. The tariffs are now at 9 percent and could rise as high as 15 percent by January if the tax bill, which repeals a portion of the tax code known as the "foreign sales corporation," isn't enacted
fxstreet.com
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There's a waste of $13B
They should just drop price supports and be done with it.
We have to waste $13B to get anything done.
It's the American way. ng
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