Bush signs $136 million corporate tax bill
President Bush showered $136 billion in new tax breaks on businesses, farmers and other groups Friday, quietly signing the most sweeping rewrite of corporate tax law in nearly two decades.
Announcing the action without fanfare aboard Air Force One, the White House said the new law is good for America's workers because it will help create jobs here at home.
The election-year measure is intended to end a bitter trade war with Europe and supporters said it provides critical assistance to beleaguered manufacturers who have suffered 2.7 million lost jobs over the past 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 conference committee that ironed out differences between the two chambers.
Though the legislation provides new tax breaks, Congress' Joint Committee on Taxation says it has no impact on the deficit because it also closes corporate tax loopholes and repeals export subsidies.
Opponents disagree, saying it will swell the nation's huge budget deficit with a massive giveaway that will reward multinational companies that move jobs overseas and 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, which has lost 2.7 million jobs over the past four years. 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.
John Kerry's presidential campaign says the assertion that the new law is revenue-neutral is bogus because many of the tax breaks in the new law are for only one or two years and likely will be extended by Congress, while revenue-saving offsets are for 10 years.
The law will "shut down corporate tax abuses -- without increasing the federal deficit," insisted House Ways and Means Committee chairman Bill Thomas, R-Calif.
There was no signing ceremony.
The measure is the most sweeping overhaul of corporate tax law since 1986. It replaces the $49.2 billion export tax break with $136 billion in new tax breaks for a wide array of groups from farmers, fishermen and bow and arrow hunters to some of America's largest corporations. Among the beneficiaries: native Alaskan whalers, importers of Chinese ceiling fans and NASCAR race track owners.