Bush Signs $136 Billion in New Corporate Tax Breaks Into Law

President Bush quietly signed the most sweeping rewrite of corporate tax law in nearly two decades Friday, giving $136 billion in new tax breaks to businesses, farmers and other groups.

Announcing the action without fanfare aboard Air Force One, the White House said the new law would help create jobs.

The election-year measure was intended to end a bitter trade war with Europe, and supporters said it provided critical assistance to beleaguered manufacturers who had suffered 2.7 million lost jobs over the last four years.

The legislation also includes about $10 billion in assistance for tobacco farmers. A Senate provision that would have coupled the assistance with regulation of tobacco by the Food and Drug Administration was dropped by the committee that ironed out differences between the House and Senate.

Opponents of the measure say it will swell the nation’s huge budget deficit with a massive giveaway to multinational companies that move jobs overseas. They also say it will add to the complexity of the tax system.

The centerpiece of the tax legislation is $76.5 billion in new tax relief for the battered manufacturing sector. Manufacturing in the law is broadly defined to include not just factories, but also oil and gas producers, engineering, construction and architectural firms and large farming operations.

Sen. John F. Kerry’s presidential campaign said the assertion that the new law was revenue-neutral was bogus because many of the tax breaks were for only one or two years and probably would be extended by Congress, while revenue-saving offsets are for 10 years.