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Friday, Nov. 7, 2003

"Who wants to vote for a bill to make cheap imports cheaper?" asked Rep. Donald Manzullo, R-Ill. "It is looked upon as a trade bill because we're going to reward companies to move production offshore. Who wants that?"

Twenty-three Republicans, including Manzullo, have told the House's Republican leadership they don't want that. They signed a rare public letter declaring they want the bill changed.

House Speaker Dennis Hastert, R-Ill., acknowledged Thursday that the GOP did not have enough votes yet to pass the bill, and was getting an earful from anxious lawmakers.

"Members are frustrated. Don Manzullo and folks like that are frustrated," he said. "They've seen a lot of jobs disappear from their district and go to other places."

The bill's supporters voice optimism that members will change their minds when they learn more about the tax cuts in the bill.

Rep. Jennifer Dunn, R-Wash., who hesitated to support the bill before realizing that software giant Microsoft would benefit from its tax cuts, is now selling the bill to other members. She said two of the 23 members opposing it had already changed their minds.

"They'll support the bill," she said. "You just have to do it one by one."

A group of lawmakers, hoping to give the struggling sector a competitive boost in world markets, lobbied hard most of the year for a tax cut aimed at American manufacturers. The House Ways and Means Committee passed those tax cuts, and more than $70 billion of the bill's benefits go to manufacturers. The 10-year package of $128 billion in tax cuts would "cost" the U.S. Treasury $60 billion. Part of its "cost" is paid for by items that close tax shelters.

The bill also changes international tax rules and cuts taxes on multinational corporations, which Democrats estimate add up to $40 billion over a decade.

Republicans on the House Ways and Means Committee have repeatedly circulated studies showing that U.S. multinationals generate millions of American jobs, but members who see layoffs in their districts say the tax cuts for multinational corporations will only make the job losses worse.

"It's because of the problems right now with manufacturing, the competition with China in particular," said Rep. Sue Myrick, R-N.C., who leads an organization of the House's most conservative Republicans.

The divide among members is economic, not ideological, she said. "I think it's very split," she said. "It depends on what your district's like."

Many of the members publicly opposed to the bill come from regions that have lost manufacturing jobs, such as Illinois, Pennsylvania, North Carolina and Ohio. Rep. Jack Quinn, R-N.Y., said many lawmakers from New York remained undecided and would formally present their concerns to GOP leaders.

Rep. Ray LaHood, R-Ill., said 20 to 40 Republicans opposed the bill. He said he could not vote for it because it would effectively raise taxes on Caterpillar Inc., headquartered in his Peoria district.

"They don't have the votes for passage," he said. "It's not going to pass this year."

Most frustrating for some members is that they have to debate the bill at all. Congress has been forced into rewriting its tax laws because the World Trade Organization declared a $5 billion annual tax break for exporters illegal.

The manufacturing and international tax breaks are designed to replace the benefits that will be lost when Congress abolishes a disputed break for exporters. The European Union will impose as much as $4 billion in sanctions beginning next spring if the rules aren't changed.

"My gut feeling about this is we fought a revolution 230 years ago to stop Europeans from telling us how we had to tax in this country," Hastert said. "It puts the hair up on the back of my neck that we have to do this at all, but we have to do it."

© 2003 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.

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