Washington A bipartisan agreement between President Clinton and House Speaker Dennis Hastert, R-Ill., to spur economic development in poor communities is in danger of collapsing because of efforts in the Senate to load it up with billions of dollars in special-interest tax breaks.
What started out as a $17 billion "New Markets" bill passed by the House in July would now cost $38 billion because of tax breaks added by influential senators, many of which have nothing to do with the legislation's purpose of helping residents of poor urban and rural communities.
Wednesday, Senate Finance Committee Chairman William Roth Jr., R-Del., postponed a formal consideration of the bill for the third time in little more than a week because of difficulty coping with literally tens of billions of dollars more in requests from colleagues in both parties.
"Everyone knows if we have a Christmas tree tax bill, we'll never get it done," said Sen. Orrin Hatch, R-Utah, a Finance Committee member.
The bill, first advanced by Clinton and Hastert during an unusual joint appearance in Chicago last year, represents the most significant congressional initiative to address poverty in years. It includes provisions to spur capital investment in low-income urban and rural areas; create 10 venture capital firms to invest in small businesses in poor neighborhoods; and expand the number of "empowerment zones" where tax breaks and regulatory relief apply.
But since the bill reached the Senate this summer, it has been amended to include a vast array of unrelated measures, including a big Amtrak subsidy, incentives for Internet cable companies and tax breaks for farmers and certain domestic oil and gas producers. The controversy over the bill is the latest installment in a year-end feeding frenzy in which Congress is moving to approve the biggest spending increases since the Republicans took control in 1995.
With most of the major GOP tax legislation dead for the year, the community development measure looms as a major target for special-interest pleading. Roth initially added about $11.5 billion in costs to the House-passed bill, including a measure authorizing Amtrak to sell $10 billion worth of bonds to develop high-speed rail service. Committee members then bombarded Roth with proposals for 72 amendments, many of them costly tax items. While balking at first, the chairman eventually agreed to accept 36 of the amendments from GOP and Democratic members, adding $9.5 billion more to the bill's total cost.