Business lobbyists press to make tax cut permanent

By Curt Anderson

Associated Press

WASHINGTON – Business lobbyists pledged today to join House Republicans in an all-out effort this fall to make permanent the just-passed $1.35 trillion tax cut, which under current law would expire at the end of 2010.

The National Association of Manufacturers, National Federation of Independent Business, U.S. Chamber of Commerce and the National Association of Wholesaler-Distributors sent representatives to the Capitol to discuss strategy for the measure with GOP lawmakers. They said they were speaking on behalf of about 1,000 organizations that want to get rid of the tax cut’s “sunset” provision.

“It makes no sense, in our view,” said Michael Baroody, National Association of Manufacturers’ executive vice president. “We’re committed to working together to finish the job.”

Legislation to make the tax cut permanent is sponsored in the Senate by Republican Sen. Phil Gramm of Texas and in the House by GOP Reps. Kenny Hulshof of Missouri and Paul Ryan of Wisconsin. Preliminary estimates show that would add about $112 billion to the tax cut’s 10-year cost, beyond which Congress does not make official projections.

Hulshof, like Ryan a member of the tax-writing Ways and Means Committee, said sponsors will attempt to attach the measure to other must-pass legislation – one candidate is a bill to extend other tax breaks that expire this year – to overcome opposition in the Democratic-controlled Senate. It was Senate budget rules in the first place that required the tax cut to expire after one decade.

This has led to a great deal of uncertainty, particularly among businesses and people planning their retirements, about the future of such long-term provisions as major changes in pension laws, across-the-board income tax cuts and repeal of the estate tax. The estate tax, in fact, would only be dead for one year, coming back to life in 2011.

“American taxpayers should not be held hostage to technical budget rules in the Senate,” Hulshof said.

Democrats reacted coolly to the idea, saying there is little need for immediate action and that Congress would be better served to examine the nation’s economic health after a few years before deciding whether to keep the tax cut on the books. Many Democrats also contend that the huge cost of the tax cut will eventually jeopardize the Social Security and Medicare trust funds, especially if it continues in a second decade or beyond.

“I don’t think we ought to go back and prejudge a budget question,” said House Minority Leader Dick Gephardt, D-Mo.

Most likely, making the tax cut permanent would require 60 votes in the 100-member Senate to pass. Although the tax bill got 62 votes, that was before Democrats assumed control of the chamber and embarked on their own agenda.

“There are priorities that must be addressed,” said Mike Siegel, spokesman for Senate Finance Committee Chairman Max Baucus, D-Mont. “It’s premature to have any discussion of where we may or may not be in three or four years.”

Senate Minority Leader Trent Lott, R-Miss., told reporters that if the House passes a bill ending the sunsets, Republicans in the Senate will attempt to force votes on it, perhaps several times if it doesn’t pass initially.

“There will be votes on that. Senators may vote against it. Let them explain that,” Lott said. “We’ll probably do it more than once.”

Rep. Roy Blunt, R-Mo., said many Republicans are frustrated it has taken so long to get the measure moving. “This is like hitting your head against the wall,” he said.