Campaign Reform Spat Derails Tax-Extension Bill

A campaign reform dispute caused the House on Wednesday to reject an otherwise popular bill that would have extended the deadline for tax returns filed via the Internet and provided taxpayers other benefits.

The 219-205 vote against the measure pushed by House Republican leaders was, to some degree, an embarrassment for both parties.

Democrats, who led the opposition to the bill, won their argument that the legislation contained an unacceptable provision loosening financial disclosure requirements for certain political groups.

But they faced the challenge of explaining to voters why defeating such an arcane proposal was more important than passing a bill dubbed the Taxpayer Protection and IRS Accountability Act.

The bill would have changed the April 15 deadline for the first time in nearly half a century, granting an estimated 50 million “e-filers” an extra 15 days to file, starting next year. It also would have expanded aid to low-income taxpayer clinics and eased some penalties for taxpayers who make good-faith mistakes.

But the financial disclosure provision caused the vote to be viewed by most lawmakers as a question dealing more with campaign reform than taxpayer rights.

For GOP leaders, the vote represented their second stinging defeat this year on campaign finance reform. Twenty-five Republicans strayed from the leadership line, demonstrating anew the strength of the coalition that backed a major campaign law enacted last month.

Rep. Rob Portman of Ohio, a Republican leader on tax issues who supported the bill, blamed its defeat on partisan strife.

Leading Democrats, though, praised the outcome as another victory for advocates of campaign reform. House Minority Whip Nancy Pelosi (D-San Francisco) said reformers had turned back “sneaky tactics employed by Republicans to try to railroad this vote through the House--using a bill with a popular-sounding name.”

At issue was a provision to ease 2-year-old rules requiring some tax-exempt groups active in politics to report their donations and contributions to the federal government. The GOP leaders said they merely wanted to exempt state and local groups that were already filing similar information to state authorities.

Critics said the provision could enable groups wishing to hide their political activity to take advantage of lax reporting requirements in some states. The result, they claimed, would be a weakening of current disclosure rules and of the newly enacted law curbing the unlimited political donations known as soft money.

Rep. William M. Thomas (R-Bakersfield), chairman of the House Ways and Means Committee and the chief proponent of the provision, derided the criticism as an “urban myth.”

But 25 Republicans joined 193 Democrats and one independent to block the provision and the entire bill. All of California’s 32 House Democrats voted against the bill. Only one California Republican joined them: Rep. Stephen Horn of Long Beach. Rep. John T. Doolittle (R-Rocklin) did not vote.

The vote against the bill was not even as close as it looked. House Republican leaders called up the measure under a special procedure that limited debate, barred amendments and required a two-thirds majority for passage.

Even if the bill had passed the House, leading senators were promising to block its political disclosure provision.

On another campaign finance matter, Sen. Mitch McConnell (R-Ky.) announced that a coalition of groups is joining his legal challenge to the new campaign reform law.

Among the groups McConnell said would be co-plaintiffs in a lawsuit seeking to overturn the law as unconstitutional: the American Civil Liberties Union, the National Right to Life Committee, the Southeastern Legal Foundation, the Libertarian National Committee and the Christian Coalition of America.

“Where constitutionally guaranteed American political freedoms are concerned, there is no ideological divide,” McConnell said of the diversity of the groups. “There are no special interests. There is only one interest: freedom.”

Also Wednesday, the Senate moved to end debate on a bill to overhaul voting systems nationwide in response to the 2000 election controversies. A vote on final passage could come as early as today.