• News

Steel, Oil, Gas Bailout Faces Senate Test

WASHINGTON -- A proposal to provide more than $1 billion worth of taxpayer-backed loans for domestic steel, oil and gas companies faces a fight in the Senate this week.

Senate Majority Whip Don Nickles, R-Okla., is heading an effort to prevent the Senate from even debating the legislation. A showdown vote is scheduled for Tuesday, in which supporters of proposed loans will have to muster 60 votes for the measure to survive.

Both sides say they think the vote will be close.

Earlier this year, Sen. Robert Byrd, D-W.Va., proposed providing $140 million to back $1 billion worth of loans for some small steel companies facing competition from low-priced imports. Among the qualifying companies would be the Weirton Steel Corp. of Weirton, W.Va.

Byrd attached the plan to legislation paying for the war with Yugoslavia. As House-Senate bargainers hammered out a final version of that bill last month, Byrd agreed to drop his provision in return for a prompt vote on it.

Sen. Pete Domenici, R-N.M., proposed a similar, $500 million loan program for struggling oil and gas companies, at a cost to taxpayers of $125 million. The Domenici and Byrd proposals have been joined into a single bill, and aides say steel, oil and gas company lobbyists have been helping in a behind-the-scenes struggle to line up the needed 60 votes.

Should Byrd and Domenici overcome Nickles' challenge, the Oklahoman is ready with several amendments aimed at "improving" the loan programs, said a Nickles aide.

House Speaker Dennis Hastert, R-Ill., has promised that chamber will vote on the legislation should it survive in the Senate.

Senate leaders hoped Monday that the chamber would zip through a $21.7 billion measure financing water projects and Energy Department programs, but they ran into a problem: absent senators.

In an unusual public spanking, Senate Majority Leader Trent Lott, R-Miss., took to the Senate floor to chide his colleagues. Senate aides said 10 to 15 senators would not have been available to vote Monday evening, even though Lott had announced in advance that votes could occur after 5 p.m. Monday.

Lott said many senators had returned to Washington "from all the way across the country to be here ready to vote. ... So I am very disappointed," he said.

Meanwhile, Sen. Edward Kennedy, D-Mass., served notice that he might offer an amendment to the energy-water bill aimed at helping workers with disabilities, such as expanding their eligibility for Medicaid.

Though the measure has 78 co-sponsors from both parties, it has been blocked by Sen. Phil Gramm, R-Texas. He opposes the tax increase Kennedy has proposed to pay for the measure, which includes limiting how some people who owe taxes overseas can reduce the U.S. taxes they owe.

Kennedy has said he will not offer the legislation if he can get assurances the disability bill will be voted on soon.

Senate Majority Leader Trent Lott says a cut in capital gains taxes would raise money to help Republicans reduce other taxes, but official congressional forecasts say otherwise.

Lott, R-Miss., told a National Association of Manufacturers luncheon Monday that reducing taxes on investors would stimulate economic growth and produce a brief upsurge in revenue as people sell their investments at the new lower rates.

"In order to have tax cuts the first couple of years, we have to have capital gains rate cuts," Lott said.

But according to official estimates from the Joint Committee on Taxation, most proposals to reduce capital gains taxes would result in a revenue loss or an increase so small it could accomplish very little for other tax cuts.

For example, cutting the top capital gains rate from 28 percent to 15 percent would produce just $100 million for the government the first year, quickly followed by $14.3 billlion in losses over five years. And cutting the top rate to 10 percent means a loss of $800 million the first year, $50.2 billion over five years.

User Response
0 UserComments