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Senate Approves Energy, Tax Bills

By Eric Pianin
and Helen Dewar

The Washington Post


The Senate Thursday approved a wide-ranging energy bill and a $27 billion tax package that President Bush has threatened to veto as lawmakers pushed to complete the work of the 102nd Congress and return home to campaign.

The Senate also overwhelmingly approved a landmark change in western water policy that would limit sale of federally subsidized water to California farmers and divert some of it to cities, industries and wildlife habitats.

The energy bill, which Bush is expected to sign, was passed by voice after the Senate voted 84 to 8 to cut off a filibuster that held the measure up for days in a dispute over language to speed development of a nuclear waste dump in Nevada.

It would simplify licensing of nuclear power plants, require more efficiency from everything from shower heads to heating plants, promote broader use of alternative-fuel vehicles, expand the government's Strategic Petroleum Reserve and require a variety of other steps to encourage energy development and conservation.

The tax bill contains an urban aid package, which was once touted as Washington's response to the Los Angeles riots and big-city problems. But the legislation evolved into an unwieldy conglomeration that has become hopelessly ensnared in presidential politics.

Last spring, Bush and congressional leaders pledged to work together to fashion a comprehensive package of assistance to troubled urban areas. But since then, the House and Senate loaded up the bill with scores of unrelated tax breaks and credits, while Bush gradually lost interest in the legislation.

While the bill essentially is a tax relief measure, including many of "economic growth" initiatives the administration proposed, Congress is obliged under the 1990 budget agreement to finance tax cuts with offsetting tax increases or spending cuts. Boxed in by his recent campaign pledge to never "ever" again raise taxes and his attacks on Democratic nominee Bill Clinton as a big taxer and spender, the president has declared the revenue raisers in the bill as tax increases, and pledged to veto the bill when it reaches his desk.

The House narrowly passed the bill Tuesday, 208 to 202, and Thursday the bill appeared in trouble until 13 Republicans joined 47 Democrats to defeat a point of order raised by Sen. Hank Brown (R-Colo.) that would have killed the legislation.

The Senate then approved the bill, 67 to 22, with 44 Democrats and 23 Republicans voting for it, although Senate Minority Leader Robert J. Dole (R-Kan.) warned, "The bottom line is the president will not sign this bill."

Bush opposes a bill that contains many provisions that enjoy broad-based political support throughout the country, including 50 enterprise zones to encourage investment in urban and rural areas, tax breaks to stimulate the real estate industry, elimination of the luxury tax to boost the boat and private airplane industries, restoration of individual retirement account (IRA) benefits for middle- and upper-income taxpayers, and extension of a dozen other popular tax breaks, including those for low-income housing and research and development.

"Throughout this process we have worked assiduously to oblige what we believed to be the president's position," an exasperated Finance Committee Chairman Lloyd Bentsen (D-Texas) said. "We would have redoubled our efforts had he ever indicated what his position was going to be."

Some Democrats and Republicans complained Bush was following a double standard by condemning an urban aid-tax relief bill because of its offsetting "tax increases" while agreeing to sign an energy bill that also contained tax increases.

The cost of the energy bill is paid for with about $5 billion in revenue increases, including eight tax provisions raising $1 billion that were shifted from the tax bill to the energy bill by House and Senate conferees last week. Bush, who has long supported passage of energy legislation, has virtually ignored the tax-increase implications of the bill in his comments.