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Senate to vote today on 3 stalled bills

2 Democrats drop protests blocking relief, tax measures

WASHINGTON -- The Senate late yesterday resolved a dispute delaying passage of a sweeping corporate tax bill and two spending bills for disaster relief and homeland security, clearing the way for senators to adjourn today to hit the campaign trail.

The agreement removed parliamentary roadblocks thrown up by two Democrats seeking funding for programs that weren't in the bills. Senator Mary Landrieu of Louisiana had wanted the tax measure to include pay support for members of the Reserves and National Guard, and Senator Tom Harkin of Iowa was blocking passage of two spending bills because he wants funding for an agriculture conservation program.

The agreement, announced by Senator Bill Frist of Tennessee, the majority leader, will allow the Senate to vote today on a bill providing $136 billion in new tax breaks for businesses and other groups, and $10.1 billion separately to buy out tobacco farmers' government quotas.

The deal also will allow votes on a bill helping hurricane victims and farmers suffering from drought, flood, and other emergencies, and on a bill to bolster homeland security.

The tax package offers $76.5 billion in tax breaks to beleaguered US manufacturers and an array of other interests. Both sides predicted lopsided passage of the bill in the Senate, which will send the measure to President Bush for his signature.

In addition to aiding manufacturers, the measure also would provide $42.6 billion in tax relief to multinational companies, which has fueled opposition to it.

Supporters have argued that the tax relief for multinational corporations would boost the competitiveness of US businesses, but opponents contend it would simply provide more tax benefits to support the movement of US jobs overseas.

''This bill is of the elite corporate interests, by the elite corporate interests, for the elite corporate interests," said Senator Edward M. Kennedy, Democrat of Massachusetts. ''It's a lobbyist's dream and a middle-class nightmare."

Landrieu was pushing a separate bill that would give employers a tax credit if they made up the pay their employees lose when they are called to active duty in the reserves or National Guard.

Landrieu's proposal would provide a 50 percent tax credit to employers for up to $30,000 in salary payments a year and was estimated to have a $2.5 billion cost over 10 years.

That proposal was in the Senate version of the corporate tax bill, but was not part of the compromise reached by a House-Senate conference committee.

Under the agreement reached yesterday, the Senate will take up and approve on a voice vote today her proposal on active-duty pay, sending it to the House, where Republican leaders are opposed to the measure. In an agreement reached with Harkin, both of the spending bills are scheduled to be approved on voice vote today and he will get a vote on a motion to instruct Senate conferees to seek to restore cuts in the agriculture conservation program.

Tempers grew short during the session yesterday. Republicans fumed about the delay, which was forcing the Senate into overtime when members had hoped to adjourn Friday to go home and campaign. The House wrapped up business Saturday.

Senator Rick Santorum, Republican of Pennsylvania, contended that ''what is going on in the United States Senate is political demagoguery at the highest levels."

The tax package, the most comprehensive overhaul of corporate tax law since 1986, provides a wide range of benefits. Among the groups affected are native Alaskan whalers, importers of Chinese fans, and NASCAR racetrack owners.

The centerpiece of the tax legislation is the $76.5 billion in new tax relief for the battered manufacturing sector, which has lost 2.7 million jobs over the past four years. But manufacturing is broadly defined to include not just factories, but also oil and gas producers; engineering, construction, and architectural firms; and large farming operations.

The bill was seen as must-pass legislation because it repeals a $5 billion annual subsidy for US exporters that has been ruled illegal by the World Trade Organization. Because of that ruling, 1,600 American exports to Europe have been hit by penalty tariffs that now stand at 12 percent and are rising by 1 percentage point a month.

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