Bill Toppled by Wave of Special Provisions

When does a Christmas tree have too many ornaments?

The answer, at least in Congress, came Thursday when a measure filled with tax breaks for special interests -- known in Capitol Hill parlance as a Christmas tree -- was yanked from the House floor by Republican leaders shortly before a planned vote.

The abrupt decision came after Democrats accused Republicans of jeopardizing a measure that began as a seemingly perfect patriotic move at a time of possible war: a tax break for military personnel and their families.

In the Republican-controlled House, the bill had morphed into a lobbyist’s dream, loaded with tax breaks for private interests ranging from the horse-racing industry to makers of fishing tackle boxes.

The bill’s transformation was not unusual; House Majority Leader Tom DeLay (R-Texas) defended the changes to it as “part of the legislative process.”

“You take things that are important to you and you put them on a train that is leaving the station,” DeLay said.

What was unexpected is that the effort got sidetracked.

Along with worrying about political fallout from Democratic attacks, GOP leaders faced opposition to the special-interest provisions from within their own ranks.

As a result, the bill is expected to return, perhaps next week, stripped of many if not all of its controversial provisions.

“We could have passed it,” said an aide to a senior Republican. “But there were a lot of [GOP] members who were uneasy about it.”

Rep. Jim McCrery (R-La.), who sponsored the provision to aid the horse-racing industry, said, “We win some and we lose some.”

McCrery’s proposal would have repealed a tax on winnings from bets placed on U.S. horse races from abroad.

Rep. Jerry Weller (R-Ill.) added a provision to eliminate a tax on fishing tackle boxes. Rep. Paul Ryan (R-Wis.), a member of the Congressional Bowhunting Task Force, tacked on a measure to aid the U.S. bow-and-arrow industry. And Rep. Rob Portman (R-Ohio) put forth a measure to lower taxes on diesel fuel manufactured in his state.

All were attached to legislation -- enjoying bipartisan support -- that would ease the tax burden on the families of U.S. troops killed in the line of duty. Additionally, the bill would grant a capital gains tax break for military personnel who sell their homes during or after a period of extended duty, and expand deductions for travel by National Guard members and reservists.

It also would extend to the families of the seven Columbia space shuttle astronauts who died Feb. 1 the tax benefits for the relatives of troops who die in the line of duty.

Over the next decade, these tax breaks would total $482 million. The provisions added to the bill would have, however, roughly doubled the cost.

Republicans hoped to reduce the cost by temporarily banning U.S. companies from moving their headquarters offshore to avoid taxes.

But Democrats attacked the additions to the bill.

“The tax relief for military men and women would be passed right now had the Republican leaders not insisted on including pet provisions,” said Rep. Charles B. Rangel (D-N.Y.). “I do not care what the arguments are, tax breaks for fishing tackle box makers, bow and arrow sellers and foreign horse race gamblers are never more important than getting this tax relief to our troops as soon as possible.”

Supporters of the add-ons defended them as good for the U.S. economy.

McCrery said repealing a 30% withholding tax on winnings from bets placed on U.S. horse races from outside the country would help the domestic horse-racing industry.

The provision on fishing tackle boxes would repeal a 10% excise tax on the product. “The problem is that companies are now marketing sewing kits or jewelry boxes [as fishing tackle boxes] ... but they’re not subject to the excise tax,” said Ben Fallon, a spokesman for Weller.

The measure dealing with bows and arrows would have extended to imported arrows a tax paid by U.S. manufacturers.